Maryland Gov. Martin O’Malley said Monday that he would ask lawmakers to approve an unprecedented tax increase on gasoline, applying for the first time Maryland’s 6 percent sales tax to every gallon of gas to raise billions of dollars for road and transit projects.
The sales tax would be phased in annually in increments of 2 percent at the wholesale level, meaning that a gallon of gas that now costs $3.48 at the pump would increase 6 cents.
If the price of gas rises or falls, the sales tax amount would also. Combined, the three-year increase per gallon could total 18 cents or more, making Maryland’s combined levy on gasoline more than 41 cents a gallon and among the highest in the country.
O’Malley (D) made the announcement during his monthly appearance on WTOP’s “Ask the Governor” and declined to comment further later in the day at his only scheduled public event in Annapolis. During the radio program, O’Malley said his full proposal would be sent to the legislature within days and acknowledged it would not be popular. But he urged lawmakers to consider whether it was “a good way to go.”
Marylanders have to decide, O’Malley said, if “what all of us are paying right now in terms of idling in traffic congestion, time away from family, time away from work, that all of that is more expensive in the longer term than making this investment in transportation.”
A new Washington Post poll, however, indicates O’Malley’s proposal could be his most unpopular effort of the year and draw opposition from a broad swath of voters and lawmakers.
O’Malley has proposed an array of other tax and fee increases, including on six-figure earners and homeowners, to close the state’s budget shortfall and to increase spending on environmental projects.
Voters are split on those initiatives, but raising the price of gasoline was a non-starter for most.
Fewer than half surveyed last week by The Washington Post supported even a 5 cent increase in the state’s 23.5-cent-per-gallon flat tax.
When asked how they felt about an increase of 10 cents per gallon or more to fund additional road and transit work, opposition swelled above 70 percent and across a range of income levels.
“The governor is walking into the biggest nightmare of working-class families,” said Senate Republican leader E.J. Pipkin (Queen Anne’s). “With this new gas tax, the citizens of Maryland will be paying premium and getting regular. . . . Add that to his other proposed tax increases, and I don’t see how Maryland is attractive to businesses — the governor’s stated goal.”
Several Democrats in the General Assembly said they wanted to wait and see O’Malley’s proposal before taking a position. House Speaker Michael E. Busch (D-Anne Arundel) said any discussion of raising the gas tax would have to come after the legislature agrees on a plan to close the state’s roughly $1 billion shortfall.
The governor’s spending plan includes other controversial measures, including shifting a share of teacher pension costs to counties, which counties say they can’t afford.
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