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Tax and Borrow Plan Advanced by Delaware Gov. Markell to Fund Transportation

The 10-cent gas tax hike the governor proposed would only meet Delaware's transportation needs half-way. Gov. Markell also endorsed borrowing $50 million a year, matching the additional gas tax revenues. Combined, DelDot's debt load would be reduced.
February 2, 2014, 7am PST | Irvin Dawid
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If Wyoming Gov. Matt Meade could raise his state's gas tax by 10-cents last July, a 71% increase; why shouldn't Del. Gov. Jack Markell give it a try? It would hike the 23-cent gas tax by 43% to help meet the state's underfunded transportation needs.

According to Markell's press release, "Delaware’s motor fuels tax has not been increased in the last 19 years (since 1995)." It ranks #32 on the state gas tax list [PDF] as of Jan.1, with California's 52.5-cent tax being #1.

While Gov. Markell did not mention the gas tax increase in his State of the State address on Jan. 23, he did ask "that the state invest $1.1 billion in transportation infrastructure over the next five years. This represents a $500 million increase in the Delaware Department of Transportation's current five-year plan," writes Sarah Barban.

On Jan. 29, Markell proposed "a 10-cent increase to the state gas tax that he says would generate $50 million per year for the state's Transportation Trust Fund. He is proposing that DelDOT borrow additional funds [for five years] to make up the rest," writes Barban.

Despite the fact that the plan calls for DelDOT to borrow $50 million a year, the plan would help DelDOT pay down its debt, Markell claimed. The transportation department spends roughly 24 percent of its revenues on paying off its debt. Under the proposed plan, that percentage would be reduced to 22 percent in Fiscal Year 2015.

Markell states that the gas tax hike proposal "was driven by recommendations made by the Transportation Trust Fund Task Force in a 2011 report [PDF] that stated the (fund) had been receiving insufficient funding over a significant period."

"These challenges have caused the postponement or delay of more than 55 road projects in the current fiscal year," he said. "The bottom line is that the Transportation Trust Fund lacks a reliable revenue source."

It would appear that the Democratic governor has his work before him. He indicated that he wanted bi-partisan support but some legislators, including Republican Senate Minority Whip Greg Lavelle, didn't "feel that the governor has worked hard enough to appease both parties," wrote Barban.

Notwithstanding the funding woes of its Transportation Trust Fund, Delaware was ranked first in a survey last year in having user fees pay for transportation needs.

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Published on Thursday, January 30, 2014 in Smyrna-Clayton Sun-Times
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