Maryland would raise its tax on gasoline 15 cents per gallon — to one of the highest rates in the nation — and would boost fees on every bus and rail passenger under a plan endorsed Tuesday by a commission created by the General Assembly and Gov. Martin O’Malley (D).
The taxes and fees would have Maryland households paying hundreds of dollars more a year to prop up a transportation trust fund that is failing to keep pace with billions in unfunded projects.
Taxing gas
The gas tax increase would be phased in, with five-cent increases in each of the next three years, but costs for titling, registering and inspecting cars, as well as riding on bus and rail lines, could increase all at once next summer.
O’Malley has suggested he would support some hike in the gas tax, and he already has asked lawmakers to begin debating the issue — a potentially defining one for the governor as his star rises in the Democratic Party.
In recent months, O’Malley has forcefully advocated a mix of new state revenue and spending cuts to close Maryland’s budget shortfall while also urging an increase in public infrastructure investments that could promote job growth. O’Malley has cast his as a more balanced plan than the cuts-only approach embraced by Republicans on Capitol Hill.
But a 15-cent hike in the gas tax could make fuel prices in Maryland among the highest in the country, hitting the state’s poor and middle-class residents and putting O’Malley at odds even with many in his own party about how far to go in raising taxes.
Under the plan, Maryland’s gas tax would rise to 38.5 cents from 23.5 cents. It would be more than 60 percent higher than the District’s gas tax and nearly double that in Virginia. It would also be indexed to inflation, inching up indefinitely thereafter.
The proposal is similar to a 10-cent hike and indexing plan endorsed early this year by leading Democrats in the Maryland Senate, and co-sponsored by over a quarter of the members of the General Assembly.
But the full scope of Tuesday’s recommendations is bound to expose rifts among rural, suburban and urban lawmakers about who should be responsible for paying for Maryland’s backlog of transportation-related projects, as well as just what should be in the state’s list of projects — now $40 billion and growing.
Maryland’s Transportation Trust Fund covers not only road and bridge maintenance but also multibillion-dollar transit projects, port and freight-line improvements, and even environmental initiatives to reduce stormwater runoff into the Chesapeake Bay.
“Under this proposal, it comes down to the shoulders of the motorists . . . and there’s not enough money in drivers’ pockets to fund it all,” said Lon Anderson, spokesman for the American Automobile Association-Mid Atlantic.
In all, the plan endorsed by the Blue Ribbon Commission on Maryland Transportation Funding would raise an estimated $870 million annually, with $491 million of that coming from what would be the first gasoline tax hike since 1992. Car registration fees would increase 50 percent, bringing in $165 million. Unspecified bus and rail fee increases would garner about $26 million.
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