New local gasoline taxes will touch off sharp price increases at hundreds of Washington-area service stations and send motorists scurrying to Maryland where gasoline will cost 4-to-8 cents a gallon less this summer, according to dealers and industry officials.
After July 1, gasoline taxes will increases about 4 1/2 cents a gallon in Virginia and 7 1/2 cents in the District -- making the taxes here among the highest in the country.
In suburban Maryland, with about 750 stations, there has been no increases. Northern Virginia has about 500 stations and the District of Columbia 250.
The increases would add nearly $1 to the price of a 20-gallong tankful of gasoline in Northern Virginia and $1.50 in the District of Columbia.
"This will create a crisis for dealers and motorists. People will go straight across the line to Maryland where gas will be cheaper," said Vic Rasheed, executive director of the Greater Washington-Maryland Service Station Association.
The Virginia tax increase, approved by the state legislature last March, consists of a 2-cent per gallon statewide increase plus a 2 percent increase in northern Virginia to help pay for Metro construction.
In the District of Columbia, the City Council approved late Tuesday night a new 6 percent gasoline tax on top of an existing 10-cent per gallon tax. The total -- about 17.7 cents a gallon -- is the highest gasoline tax in the nation except for Chicago, oil industry analysts said yesterday.
The Council action, subject to likely final approval July 1, comes less than two weeks after Congress overwhelmingly turned down President Carter's effort to impose a 10-cent per gallon "conservation fee" on gasoline nationwide.
"Apparently the politicians on the lower lever are not afraid to raise the taxes," said William W. Mahoney, deputy director of state relations at the American Petroleum Institute, an oil industry trade organization.
Mahoney said six states in addition to Virginia and the District of Columbia are raising their gasoline taxes this year -- Indiana, Kentucky, Minnesota, Nebraska, South Dakota and Wisconsin -- but in each case the increase is only a few cents.
"When you start talking about 6 percent you're talking about a lot of money," Mahoney said of the forth-coming D.C. increase.
At least two states, Indiana and Washington, recently have switched from a flat pennies-per-gallon tax to a percentage tax on the total price of gasoline so that revenues automatically will increase as gasoline prices rise.
State legislatures became interested in changing the structure of their gasoline tax collections last year when soaring prices sent demand down, resulting in reduced gasoline tax revenues.
At the same time, Congress steadfastly has refused over the decades to change the 4-cent per gallon federal gasoline tax, even though gasoline taxes in most other industrial countries are much higher -- more than $2 per gallon in some West European nations. The tax in Italy, for example, is $2.12 a gallon.
Carter's proposed "conservation fee" was intended to pressure people into buying less gasoline and at the same time rise revenues and preempt price increases by oil-producing foreign countries.
The state increases -- including Virginia's -- are to raise revenues for highway construction and other transportation projects.
The District of Columbia increase is a general revenue-raising device, part of a tax-increase package that Mayor Marion Barry put together to help cover his city's enormous deficit.
Critics of the gasoline tax say that it affects the poor the most.
"The people this will really hurt are blue-collar employes in D.C., the people who can least afford it," said Paul Pierce of the Service Station Dealers of America, a trade organization.
Critics of the gasoline tax, like Rasheed, also question whether it will raise as much money as the city expects.
Bill Cook, associate director of the city's Department of Finance and Revenue, said yesterday that the new tax will raise $2.3 million through Sept. 30 and $13 million the next year.
His calculations are based on sales of about 17 million gallons of gasoline a month in D.C. He assumed in making his calculations that these sales would fall off about 16 percent as a result of conservation and some motorists buying in Maryland instead of the District of Columbia.
Rasheed says the falloff could be closer to 40 percent of sales, driving some stations out of business in the District of Columbia and forcing other dealers to lay off employees.
By the time the city pays unemployment benefits to those laid off, Rasheed contends the effect of the new tax could be a very small net gain or even a net loss in revenues to the city.
"It's going to cause complete chaos," said Pearl Binsted, an Exxon dealer on MacArthur Boulevard in northwest Washington. "There's no way that anyone would come to the District and buy gasoline . . . people who go out from here to Maryland or Virginia to work -- they'll buy gas while they're out there."
At Art Mitchell's Gulf station on Georgia Avenue just inside the D.C. line yesterday, you could look north into Silver Spring and see an Amoco station just a few hundred yards away.
"I guess everybody's going to buy gas in Maryland now," said Gus Simmons, a regular customer at Mitchell's.
Mitchell looked up the street at the Amoco station and shook his head. "If it goes up 8 cents here," he said, "they'll have gas lines in Maryland and we'll be standing here twiddling out thumbs."