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Speed Bumps on the Gas Tax Highway

 Maryland Senate President Thomas V. Mike Miller’s proposal to add a three percent sales tax to gasoline would cost Maryland  959 jobs and $124.4 million in economic activity, according to a report from  the Baltimore-based Sage Policy Group commissioned by Americans for Prosperity.

The report studied Miller’s plan, and two other gas tax proposals, including adding Maryland’s six percent sales tax to gasoline,  which Governor Martin O’Malley proposed last year.

 Of, course this isn’t the only study out there which talks about the harm this gas sales tax will do to middle and working class families.  Both the Sage report and a study by the Maryland Public Policy Institute found that a three percent sales tax on gasoline would consume significant portions of the incomes of households earning between $20,000 and $50,000.

In a state such as Maryland, where job-killing taxes are the rule not the exception, the idea that the General Assembly would consider a 3 percent, 6 percent, or flat 10-cent tax hike on gas does not shock people. Nor does it shock people when legislative leadership considers indexing the gas tax to inflation instead of leaving it as a flat rate. But, the legislative monopoly continually sticks to their arguments that a gas tax hike is necessary in order to pay for infrastructure improvements and to pay for the expansion of mass transit through the construction of the Purple Line in Washington, DC and the Baltimore Red Line.

Past experience however, leads one to believe that the predicted job losses would wind up in vain:

  • Time and time again legislation has been introduced that would create a lockbox for Transportation funding. Why? Because time after time governors have raided the Transportation Trust Fund in order to cover funding shortfalls in other areas. In fact, since 2003 over $1 BILLION has been reallocated from the Transportation Trust Fund to general fund spending.   SB 253 is not expected to move in the General Assembly, but year after the year the same amendment is re-introduced because year after year the fund is raided to balance the budget.
  • Over the last two years legislative audits of the Maryland Department of Transportation found violations of state procurement laws and serious ethics violations.  If motorists are footing the bill for raising additional money to give to  MDOT to cover the costs of transportation projects, what has changed that ensures Maryland taxpayers that the money will be spent in a legal and ethical manner?
  • A huge chunk of the proposed revenue would be dedicated to Maryland Transit Administration expansion projects, particularly the proposed Purple and Red Lines. Red Maryland has chronicled at great length MTA Incompetence, with stories that range from poor servicedelays caused by autumndrivers using their buses as toiletsusing stimulus money to buy hybrid-electric buses2010’s Train Ride from Hellrewarding students for not misbehavingwoeful farebox recovery rates and issues with crime. MPPI found that over 54 percent of transportation revenue goes to mass transit even though it accounts for less than fiver percent of all travel.
  • Many gas tax proponents call for additional construction of mass transit projects. However, they neglect to call for added lane miles to solve ridiculous highway congestion, nor does it even guarantee that any of the increased revenues will be dedicated to highway maintenance and construction.
  • Instead of increasing gas taxes and the cost of travel, Maryland should embrace privatization. Specifically, Maryland could privatize operation of its toll roads and mass transit systems for use. Miller’s bill does call for the privatization of the Intercounty Connector, but does not take the additional aggressive step to call for the privatization of the Harbor Tunnel, Fort McHenry Tunnel, John F. Kennedy Higway, Harry Nice Bridge, or the Bay Bridge. Nor does it address the idea of allowing for the Purple or Red Lines to be built and operated by private companies in lieu of government investment.
Thus we have the  two-headed monster of any potential gas tax increase; the knowledge that a tax increase will disproportionately harm middle and working class Marylanders, while at the same time understanding that the monies collected by any additional gas-related revenue enhancements will be either squandered, mismanaged or reallocated.
Brian Griffiths isa founder and Editor of Red Maryland. Red Maryland was named one of the best state political blogs two years in a row by the Washington Post. Brian hosts Red Maryland Radio heard Thursday nights at 8pm on The Red Maryland Network.

Brian Griffiths

Co-Founder and Contributing Editor of Red Maryland; Host of Red Maryland Radio; President of the Red Maryland Network; Chairman of the Maryland Young Republicans.

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