Legislative Update: Maryland's Gas Tax Hike

The 2013 legislative session is rushing to its conclusion at a feverish pace. Just in the past week, the Senate (by one vote) recommitted the HOME Act to committee and effectively ended debate on the issue. The state operating and capital budgets have been unveiled and passed both respective chambers. And unfortunately, a massive gas tax increase has already passed both the House and Senate and will soon become law. I strongly opposed and voted against this ill-advised piece of legislation.

Without question, there are pressing transportation needs around the state, but we should have been more imaginative about how we meet such challenges. Rather than heaping billions of dollars of taxes on working class families, the legislature should have pursued other options. Some possible alternatives include dedicating gaming revenues to transportation, requiring local support for the billions of dollars in transit projects projected to be financed by the tax, and/or creating provisions to mitigate the impacts of the regressive nature of the tax. Indeed, the gas tax disproportionately harms middle and lower income families, many of whom are literally living paycheck to paycheck. By 2016, when the gas tax is fully phased in, it will cost an estimated 20 cents more per
gallon (in addition to the existing 23.5 cents tax), and along with other fee increases, will take nearly $750 million per year out of residents’ pockets.

Making matters worse, the legislation includes a provision that requires automatic and annual increases to the tax, which means that the taxes collected will continue to rise—with no requirement that members of the legislature take another vote to approve them. The bill ties the existing state excise gas tax to inflationary increases, and phases in a sales tax on gasoline, which will continue to grow with the rising cost of gasoline.

While the plan is especially problematic for the working class and poor of our district and state, the increase will also negatively impact business growth by driving up the cost of goods and services that rely upon gas to transport their product. This creates a double whammy for consumers, who will pay more at the pump and in the store.

All this says nothing to the lip service paid to protecting the Transportation Trust Fund in the bill, which merely requires some basic legislative maneuvering to allow future Governors to raid the account. Or that, relative to other parts of the state, our district and Baltimore County is expected to only see a small portion of the transportation investments made possible by the gas tax revenue. For these reasons and more, opposing this massive increase to the gas tax was an easy decision.

Still other important issues remain in this legislative session. I look forward to updating residents of the district on many of these remaining issues in the weeks ahead. However, given the magnitude of the gas tax increase and its impacts on Marylanders, it was a priority of mine to let you know why I opposed the bill.