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Maryland Governor Martin O’Malley is proposing a transportation revenue package to establish a new sales tax on gasoline and other measures to raise hundreds of millions of dollars a year to fund a backlog of transportation projects.
The proposal, made public last week, was worked out during negotiations with House Speaker Michael Busch, D-Anne Arundel, and Senate President Thomas V. Mike Miller, D-Calvert.
The plan would apply a new 2 percent sales tax on gasoline starting in July. The tax would increase to 4 percent in July 2014. The proposal also would reduce the current excise tax by 5 cents, from 23.5 cents to 18.5 cents, and it would then link the excise tax to the consumer price index, so the tax would rise to keep up with inflation in future years.
Maryland is currently on track to run out of money for any new transportation projects in five years.
As the owner of a Sunoco gas station, Dave Barsotti is enraged that the governor’s proposing an increase on the tax per gallon of gas.
So Barsotti, AAA, and scores of others packed the statehouse, waiting to sound off to the governor.
Lon Anderson of AAA-Mid-Atlantic says the governor’s proposal drops the current tax of 23.5 cents to18.5 cents, but would raise the tax to nearly 26 cents per gallon and will continue to rise through 2018 to 43.7 cents, almost double the current tax.
The governor’s office says Maryland roads and bridges are crumbling. This tax would raise $800 million per year through 2018 to fix them.
During debate on Wednesday, Delegate Susan Krebs tried to amend the budget bill to repay about $1 billion in local highway user money that has been used to plug budget holes in recent years.
Krebs, R-Carroll, said the state should commit to paying back the money over three years for road repairs before seeking more money from the public.
But Delegate John Bohanan, D-St. Mary’s, said the state can’t afford the level of highway user money for counties, and he noted that some counties budgeted nothing for roads during the period the state was being asked to pay back.
The amendment failed on a vote largely on party lines in the Democrat-controlled House.