D.C. Mayor Marion Barry has asked the City Council to repeal a one-cent increase in the city's gasoline tax scheduled to take effect June 1 -- an action officials said would keep the city competitive with other area jurisdictions.
If the council goes along with Barry, the city's tax will remain at 13 cents per gallon. The action would result in the loss of a projected $2 million in additional revenue over the next year and a half.
It was the third time that Barry has asked for a repeal or reduction of gasoline tax increases that his administration initially had backed. A repeal by the council of the one-cent increase would leave the Virginia suburbs with the highest gasoline taxes in the area, followed by the District of Columbia and then Maryland.
The gasoline tax in Maryland is scheduled to rise in June from 9 cents to 11 cents. In Northern Virginia, an increase of about 4 cents a gallon scheduled for July will mean drivers will pay about 17 cents per gallon in combined state and local taxes, including sales tax and a new surcharge.
Carolyn L. Smith, director of the D.C. Department of Finance and Revenue, said the planned one-cent increase is not necessary because gasoline consumption has been higher than projected this year, resulting in more money under the current rate than the city had expected.
Smith said the action would keep Washington competitive with the other local jurisdictions.
Last year, the council rejected a request by Barry to halve a 2-cent increase in the tax. That increase, which was allowed to take effect last June, had originally been approved by the council at Barry's request.
In 1980, Barry generated a political controversy that led some D.C. gasoline station owners to threaten to close their stations when he pushed through an 8-cent increase, only to have to repeal it later.
The gasoline tax has been a politically explosive issue because gasoline dealers have complained that the city's higher rate has forced drivers to buy gasoline in nearby Maryland, where the rate has been 9 cents per gallon for several years.
During the brief period in 1980 when the 8-cent D.C. increase was in effect, gasoline dealers, particularly those near the Maryland line, reported losing much of their business to Maryland stations. The dealers staged demonstrations and organized a lobbying effort to get the increase overturned.
Barry was not available for comment yesterday on his request to repeal the tax increase.
Council member John A. Wilson (D-Ward 2), chairman of the finance and revenue committee -- which would have to approve Barry's request -- declined yesterday to say whether he favored Barry's proposal.
"I guess he knows what he's doing," Wilson said.
"I don't think there's a doubt that his action is political, but it's the right thing to do," said council member John Ray (D-At Large), a candidate for mayor who has criticized Barry for proposing gasoline tax increases. "Now he can campaign that he kept the tax down. He should have never increased the gas tax in the first place."
Without council intervention, the tax automatically will rise on June 1, based on a formula tied to the consumer price index in the Washington area over the past two years. Barry originally proposed adoption of that formula.
Smith said gasoline consumption in the District of Columbia now is projected at 162.7 million gallons for the fiscal year that ends Sept 30, an increase of 4.1 million gallons over the city's initial estimate.
Smith said city officials have increased their 1983 fiscal year projection from 148 million gallons to 156 million, still below current usage but closer than originally expected.
The city expects to collect about $21 million this year from the tax and $20.2 million next year at the 13-cent rate. A one-cent increase would add about $400,000 this year and about $1.5 million next year, for a total of nearly $2 million.
Smith said the amounts the District of Columbia will receive under the current tax already cover revenue projections, making the increase unnecessary for fiscal reasons and undesirable because it would make D.C. gasoline stations less competitive.