Brave State Legislators v. More Unfunded Mandates from Annapolis

from the Baltimore Sun

Sen. President Thomas V. Mike Miller made a pitch this week to use the upcoming special session to erase the state's structural deficit and solve a persistent funding transportation funding problem.

To achieve the goal Miller floated one of his favorite budget policy ideas: Shifting the costs of teacher pensions to the counties.

The idea is one that terrifies county leaders since it would add a new burden to their already strapped budgets. Miller suggested making up the difference with new taxes and tackling the transportation issue with "greater contributions from the users and the beneficiaries of our public infrastructure."

In a letter he sent Monday to Gov. Martin O'Malley and all 188 members of the General Assembly, Miller called moving the pension costs "good fiscal and public policy" and pointed out that if the locals paid the full amount -- $1 billion -- the state's structural deficit would no longer exist and the state could "finally talk about what we can do to best position Maryland's future in the new economy."

In 2010, the Senate passed a measure that would have eventually moved $337 million in pension costs to the counties, but it died in the House. Speaker Michael E. Busch has repeatedly said that his chamber does not have the votes to make the pension changes.

O'Malley flirted with the idea of off-loading pension costs this year, but decided to table the issue until the General Assembly cut benefits to make the retirement plan more sustainable.

Most of the talk about the special session, which has to be called so lawmakers can approve a new map for congressional redistricting, has focused on fixing the transportation trust fund. That fund is separate from the state operating budget. It pays for improvements to roads, bridges and trains.

A Blue Ribbon Commission Report on Transportation Funding published earlier this year estimated that an extra $800 million is needed for state projects. Ideas to raise money include:

* Increasing the current 23.5 cent per gallon tax on gas. Each penny increase equals $32 million in revenue for the state. Speaking at a Chamber of Commerce dinner recently, O'Malley said that he does not like relying solely on a "traditional" gas tax increase because the revenue stream will decrease as cars become more fuel efficient and people use public transportation.

* Index the gas tax to the Consumer Price Index (O'Malley has previously tried and failed to index the tax to the Construction Price Index). This could raise $66 million for the state according to the report.

* Apply the 6 percent sales tax to the purchase of gas (this would be on top of the 23.5 cent tax.) It raises $580 million.

* Increase fee for vehicle emission testing from $14 to $24, a change that would raise $15 million for the state