With gas prices projected to hit $4 per gallon this summer, Gov. Martin O’Malley’s proposed gas tax increase might be tough to sell to the state, said a spokeswoman for a group that has supported an increase in the past.
On WTOP radio Monday morning, O’Malley (D) unveiled his long-anticipated plan to raise revenue for infrastructure work through a 6 percent sales tax on gasoline, phased in during the course of three years. The levy would be on top of the current 23.5-cents-per-gallon tax.
The plan was announced a day after AAA of the Mid-Atlantic warned rising gas prices are likely to continue.
O’Malley repeated the proposal in his State of the State address, saying it was needed to improve roads and public transit and to help create jobs.
However, a new study by the Maryland Public Policy Institute noted that historically the state has diverted large amounts of transportation funds to nontransportation purposes.
In addition, higher gas taxes hit the poor disproportionately because of its regressive nature, according to the institute’s new report, “Rethinking Maryland’s Proposed Gas Tax Increase.”
“This is the worst kind of regressive tax, because it makes day-to-day living harder and more expensive for those who can least afford it,” said policy institute President Christopher Summers. “This isn’t a ‘sin’ tax. This is a tax on going to work, on going to the grocery store, on getting your kids to school.”
At the current price of $3.47 per gallon in Maryland, a 6 percent increase would add 21 cents to the cost. A Blue Ribbon Commission on Maryland Transportation Funding had recommended the state legislature increase the state’s gas tax by 15 cents during the course of three years to pay for transportation projects.
“We have said before we’d support a gas tax increase only if there was a lockbox for those funds to only go to the transportation fund, and there’s no mechanism like that in place in [O’Malley’s] proposal,” said AAA of the Mid-Atlantic spokeswoman Ragina C. Averella.
The group, which advocates for motorists, also supported a more modest increase, such as the 15 cents proposed by the commission, she said.
The governor’s proposal is unlikely to go far in the State House, she said.
“That would be quite a challenge to convince legislators that’s a good idea,” she said. “It would be a pretty hard sell.”
AAA of the Mid-Atlantic reported gas prices this week were 15 cents higher than a month ago, but an expected European Union embargo of Iranian oil, a weak U.S. dollar and other factors are likely to drive them even higher, Averella said.
“Motorists are in for potential record-setting gas prices during the first half of the year, according to many analysts, with prices likely to break through the $4-per-gallon mark this spring,” Averella said.
On WTOP, O’Malley acknowledged his idea would not be popular, but he said it would provide necessary funds to improve roads and public transportation.
A poll commissioned by The Washington Post showed 70 percent of residents opposed a 10-cent-per-gallon tax increase.
Todd Eberly, a professor of political science at St. Mary’s College of Maryland, said O’Malley’s call for a large gas tax increase could be strategic.
General Assembly members could end up lowering the proposal substantially, providing themselves with political cover while giving the governor what he wants, Eberly said.
Kimberly M. Burns, president of the organization Maryland Business for Responsive Government, opposed the governor’s proposal, saying he had offered no details to assure the additional tax revenue would go to fund transportation projects.
“As it stands now, this tax is designed to keep taking from the wallets of hard-working Maryland families and small businesses with no accountability,” Burns said.
“Maryland is heavily transportation-dependent for jobs, and this tax proposal increases the cost of doing business here and fuels our reputation as a business-unfriendly state."
cford@gazette.net
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