THE GAZETTE
Wednesday, August 28, 2013 s
Page A-9
Highway vs. transit: $4.4 billion Van Hollen, watchdog groups sue IRS Case targets election in funding should spread evenly spending by political BY
KATE S. ALEXANDER STAFF WRITER
By the time Maryland finishes handing out $4.4 billion in new transportation funding, the money should spread evenly amongroadandtransitpriorities, according to the state. Maryland lawmakers this spring passed the Transportation Infrastructure Investment Act, which raises the tax on gasoline and diesel, to bring $4.4 billion in new investment and 57,000 jobs in the next six years, officials said. The new law indexes the state’s current 23.5-cent-per-gallon gas tax,whichhasnotbeenincreased since 1992, to inflation but limits increases to 8 percent per year. The final list of projects funded under the new law will come out with the state’s Consolidated Transportation Program in early September, said Erin Henson, spokeswoman for Maryland’s Department of Transportation. When it comes to roads and transitpriorities,thestatelooksto
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fund both about 50-50, she said. Henson said the state meets with each jurisdiction to understand what projects are a priority and works to fund those. State leaders have so far announced $1.9 billion in projects funded by the new law. While in dollars, slighly more of the money promised to date funds transit projects such as the 16-mile Purple Line, a light rail planned to stretch between Montgomery and Prince George’s counties, most of the projects funded will be on roads. Henson noted that in more urban areas, the projects tend to have higher price tags. The cost of transit creates a disparity between the priorities, Sen. Richard F. Colburn said. Colburn (R-Dist. 37) of Cambridge said that while the gas tax was intended to fund road and bridge projects, it now also subsidizes transit. Even with the inflation in the new law, Colburn said the state will struggle to fund road and bridge projects in the future. Despite voting against the gas tax increase, Colburn said his region still received funding for its priorities from the state, including $50 million for a new Dover Bridge on Md. 331 and $42
million to widen and “dualize” a portion of Md. 404, a popular route to reach Ocean City. “Can you equate that $100 million with what is going to go into the new Red Line or the Purple line? No,” he said. “We are getting our priorities funded, but they don’t cost as much, and that is part of the problem.” About $1.1 billion has been announced for transit projects, with the bulk, or $680 million, going toward the Purple Line’s $2.2 billion price tag. The 15-mile Corridor Cities Transitway — planned as a bus rapid transit line between Clarksburg and the Shady Grove Metro Station — as well as Montgomery County’sRideOnBussystem,the Red Line and the MARC train. Between the Eastern Shore, Montgomery County and Prince George’s County, about another $929 million will go to about 23 road projects. Among those projects are the new $125 million Watkins Mill interchange on Interstate 270 in Gaithersburg and $100 million for an new interchange on Md. 201 (Indian Head Highway) in Oxon Hill. kalexander@gazette.net
groups classified as social welfare organizations BY
KATE S. ALEXANDER STAFF WRITER
Rep. Christopher Van Hollen Jr. has joined with political watchdog groups to challenge in federal court a tax loophole that allows nonprofits to make undisclosed political contributions in federal elections. Van Hollen (D-Dist. 8) of Kensington, together with Democracy 21, the Campaign Legal Center and Public Citizen, filed suit Aug. 21 in U.S. District Court for the District of Columbia challenging the IRS regulations that govern eligibility for tax-exempt status as a section 501(c)(4) “social welfare” organization. The IRS declined to comment. Van Hollen said in a telephone press conference that the long-standing regulations allow organizations to hide behind 501(c)(4) status and anonymously launder big money into elections. “The public has a right to know who is bankrolling these election campaigns and ads running on TV,” he said.
force the IRS to take the action Democracy 21 sought, but would require the agency to issue new regulations that would end huge sums of money being spent in federal elections by 501(c)(4) groups, he said. In 2008, 501(c)(4) nonprofits spent $82.2 million on political activity, according to Federal Election Commission filing data analyzed by the Center for Responsive Politics. In 2012, that number jumped to more than $256 million, the center reported. However, center spokeswoman Viveca Novak noted that the data published by her group is only what the nonprofits must to provide the FEC and probably does not include all spending on political activities by 501(c)(4) organizations. “Until this problem is addressed and solved, the big losers here are voters,” Wertheimer said. Scott Nelson of Public Citizen, lead plaintiff attorney in the case, said the complaint seeks to stop future undisclosed political spending by the organizations, but it would not punish any groups retroactively. As a congressman, Van Hollen has the standing necessary to bring the case to federal court, Nelson said. kalexander@gazette.net
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Tax law clearly requires those organizations engage “exclusively” in social welfare activities, Van Hollen said. Yet under the agency’s regulations, organizations could get tax-exempt status as long as social welfare was a primary focus, but it did not need to be the exclusive focus, he said. The case filed Wednesday asks the court to order the IRS and the U.S. Department of Treasury to comply with the “plain meaning of the law,” Van Hollen said. The case does not seek to tax spending in elections, he said. Organizations seeking to directly engage in election activity can apply for tax-exempt status under section 527 of the law, but those organizations must disclose donors, he said. Recent controversy about the agency’s investigations into political groups that were after tax-exempt status as a social welfare organization has embroiled the IRS. Democracy 21 is a nonpartisan nonprofit aimed at making democracy work for all Americans. Its founder and president, Fred Wertheimer, said his organization filed a petition two years ago with the IRS asking it to change its rules and close the loophole. The IRS did nothing, he said. The lawsuit would not only
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