Perhaps the most crucial element of the plan the governor discussed in a news conference today with
The central idea of the jobs package he described is quite different from the ideas he floated last month, when the governor first talked up the idea of adding a jobs bill to the work during this week's special session, which he convened for the purpose of adopting new congressional district maps. Originally, Mr. O'Malley was talking about increasing research and development and biotechnology tax credits — worthy ideas, perhaps, but not ones that would create jobs now. Those programs are designed to help fledgling companies in sectors in which the state has a great deal of long-term promise, but in the immediate term, the jobs they create number in the dozens, not the thousands.
Others, notably Mr. Busch, have been pushing instead for increased infrastructure spending. Given the hit Maryland's construction industry has taken in recent years, spending more on building and repairing roads, schools and other public works makes sense. The state has billions of dollars in unmet needs in those areas, so it could put people to work right away. And those investments would have long-term benefits in making the state's economy more efficient.
The key question is how to pay for it. Maryland is running close to its self-imposed debt limit. The state has committed itself to issuing debt that amounts to no more than 4 percent of Marylanders' personal income or 8 percent of state revenues. Under current spending plans, the state has significant capacity under the personal income standard, even if the economic recovery stagnates, but not under the revenue standard. A recent report by the state Capital Debt Affordability Committee found that if the nation falls into a double-dip recession, Maryland will probably exceed the 8 percent cap even if it adds nothing to its current spending plans.
The state could change its rules to allow itself to issue more debt to pay for the new projects, but that's a dangerous business. Maryland enjoys
That means Maryland would need more revenue in order to support issuing more bonds, and the gas tax is the most sensible avenue to explore. There is a historical nexus between the gas tax and transportation funding, and the state's 23.5-cents-per-gallon levy has not been increased in nearly 20 years. A commission studying the matter recently recommended a 15-cents-per-gallon increase, to be phased in over three years, and the governor said he is open to that idea. It would be controversial, but it is necessary. Gas taxes have simply not kept pace with the state's need for maintaining its transportation infrastructure.