Maryland suspended its gasoline tax Friday in a month-long reprieve to prices swollen by inflation and geopolitics.
“This, of course, is not going to be a cure-all,” Hogan said, as Maryland became one of the first states in the country to implement relief from skyrocketing prices, which could rise still higher after the United States banned Russian oil imports amid its war with Ukraine.
Hogan and others backed a longer holiday, but one month was a compromise with Democratic lawmakers, who noted that a lot could change within 30 days.
Virginia, California, Georgia, Michigan and Florida are among the states seeking to suspend gas taxes or delay planned increases. Virginia Gov. Glenn Youngkin (R) on Wednesday called for a three-month gas tax holiday.
Maryland’s gas tax is higher than those in 35 other states, according to the Tax Foundation. It is tied to inflation and set to increase in July. The tax holiday will deprive the state’s Transportation Trust Fund of about $94 million, but lawmakers have promised to replenish it with cash from Maryland’s unprecedented $7.5 billion surplus.
Maryland House Speaker Adrienne A. Jones (D-Baltimore County) said the tax suspension was both economic relief and a foreign policy statement.
“Suspending the gas tax for 30 days is part of a larger, unified global response to help deter Russia’s growing aggression,” she said. “This legislation won’t just provide a little relief at the pump and help stabilize our economy.”
In the week since Hogan called for a gas tax holiday, the average price per gallon in Maryland dropped by about a dime, one of the largest declines in the nation, according to AAA-MidAtlantic. The motorist advocacy group said the average price in the state was $4.17 on Friday.
Some Republican lawmakers pushed for even greater tax relief, saying the state could afford it and families desperately need it.
“We know that under a 30-day hiatus on collecting the gas tax, the average household might save 30 or 40 bucks, and with today’s prices, that’ll probably get you a couple loaves of bread and some bologna. But it’s something. It’s something!” House Minority Whip Haven N. Shoemaker Jr. (R-Carroll) said during the debate. “I think there’s so much more in the realm of tax relief that we need to do for folks.”
Senate President Bill Ferguson (D-Baltimore City) noted that his chamber passed a $58.5 billion state budget earlier Friday. It includes $350 million for tax relief, though lawmakers have not coalesced around a plan for how it should be delivered and to whom.
Ferguson praised the gas tax holiday — proposed and passed in a little more than a week — as evidence of bipartisan success.
“When there are problems that Marylanders are facing, we come together and we fix them,” Ferguson said.
Maryland’s gas tax is paid at the wholesale level and incorporated into prices at the pump. Gas station owners have already paid tax on the fuel in their underground tanks, so the legislation allows them to get an upfront refund for current inventory so they can pass on the savings immediately.
The Maryland Comptroller’s Office, which collects taxes, noted in a statement that the global oil market is volatile and cautioned motorists that prices may not necessarily drop by 36 cents for the next month.
“So while Marylanders will not pay the state gas tax for the next 30 days, the total per-gallon price will remain dependent on crude oil prices and global supply and demand,” the statement said. “No legislation — and no gas station — can ensure a fixed price during the 30-day period, but consumers will pay less at the pump than they otherwise would have due to the tax holiday.”
Comptroller Peter Franchot (D) said that he has worked with associations representing station owners and that those “patriotic” retailers promised to pass on the savings.
“Maryland residents can rest assured that whatever price they see at the pump will be 36 cents cheaper per gallon,” Franchot said. “I welcome citizens from other states, there’ll be lot of them coming to Maryland to buy tax-free gas. Please, spend a lot of money while you’re here.”