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Governor O’Malley Announces Plan to Invest in Higher Education and Transportation

O’Malley Outlines Plan to Invest $400 million in Transportation Trust Fund; O’Malley Continues to Outline Plan to Close Structural Deficit in Montgomery County

GAITHERSBURG, MD (September 24, 2007) – Governor Martin O’Malley joined with Lieutenant Governor Brown and Montgomery County Executive Ike Leggett to announce plans to invest $400 million in the Transportation Trust Fund and to invest in higher education.  Standing in the parking lot of a Park and Ride on Interstate 270 in Montgomery County, O’Malley outlined plans to increase the State’s corporate income tax rate by 1%, to make higher education more affordable for Maryland’s working class families, and to address the State’s $40 billion in unmet transportation needs.

O’Malley was also joined by Department of Transportation Secretary John D. Porcari, State Highway Administrator Neil Pedersen, Maryland Higher Education Commission Secretary James Lyons, and University System of Maryland Chancellor William “Brit” Kirwan.

“Investing in our State’s most critical intellectual and physical infrastructure will improve the quality of life for all Marylanders, and also keep us competitive,” said Governor O’Malley.  “Today, we are taking steps to ensure that we are not the first generation to leave our infrastructure in worse shape than we found it.  We are also taking steps to stabilize college tuition and upgrade higher education facilities across the state.”

“Governor O’Malley has put forth a comprehensive and long-term budget solution that is fair to working families,” Lt. Governor Brown said.  “We need to act now so that our children can inherit a future filled with the hope and optimism we all share.”

Under Governor O’Malley’s plan, a 1% increase would be applied to the State’s corporate income tax that would help fund higher education and transportation for the state.  Even with a 1% increase, Maryland’s corporate income tax rate will remain lower than Pennsylvania, Washington DC, New Jersey, West Virginia, and Delaware. 

Currently, the State faces $40 billion in unmet transportation needs, which impacts our quality of life everyday.  The State’s aging and inadequate transportation system is a threat to road safety, our quality of life, economic competitiveness and sustainable growth.  Governor O’Malley’s proposal would:

• End Transportation Trust Fund transfers to the general fund;
• Dedicate General Fund rental car tax revenues to the Transportation Trust Fund;
• Increase the vehicle titling tax by 1 percent;
• Dedicate 50 percent of the increased corporate income tax yield;
• Index the State gas tax to the CCI; and
• Institute Combined Reporting.

“I want to thank Governor O’Malley for coming to Montgomery County and hearing about the needs of our area,” said County Executive Ike Leggett.  “Montgomery County is home to several of the busiest roads in the nation and I commend Governor O’Malley for taking this critical step to investing in the State’s transportation infrastructure.” 

“Since the last major revenue increase in 1992, our transportation system has gotten bigger, older and more expensive to maintain,” said Secretary John D. Porcari.  “We need to invest more in transportation to provide Marylanders with safe and efficient highways and transit. With this funding package, Governor O'Malley is protecting Maryland's future.”

Governor O’Malley’s proposal would also protect and enhance Maryland’s knowledge economy by dedicating half of the new corporate income tax revenues to stabilize college tuition and upgrade higher education facilities.  Maryland is number one in America in advanced degrees, but the 40% increase in tuition rates between 2003 and 2005 pushed an affordable college education out of reach for too many families. 

“Investing in higher education is an important step to meet the current workforce demands,” said Maryland Higher Education Commission Secretary James E. Lyons. “Over the past several years, tuition and fee increases have outpaced annual family median income growth, making it harder and harder for middle class and low-income families to afford college.  Governor O’Malley’s proposal makes college an option again.” 

“Governor O'Malley's plan to create the first-ever dedicated funding source for higher education is historic,” said William E. Kirwan, Chancellor of the University System of Maryland. “It is a vitally important step in enabling higher education to address our state's workforce and other needs in the years ahead.”

Today’s announcement marks the fourth by O’Malley in as many days, as he rolls out his solution to Maryland’s $1.7 billion structural deficit.  Previously, the Governor has announced plans to reform Maryland’s income tax structure – making it more progressive for working families, cut Maryland’s property tax rate by 3 cents, expand Maryland’s sales tax, and close corporate loopholes.  Under the Governor’s plan, a vast majority of Marylanders - over 83% - would pay less in taxes than they currently do.  Under the Governor’s income tax plan, ninety-five percent (95%) of Marylanders would pay less and over 2.1 million tax-filers in Maryland would experience a tax reduction or no change in their income tax.