The brunt of Governor Martin O’Malley’s new $3.4 billion gas tax proposal to increase funding for Maryland’s transportation needs, will fall squarely on Maryland’s motorists and gasoline retailers.

O’Malley’s plan, supported by both Senate President Mike Miller and Speaker of the House Mike Busch, proposes to cut the state’s current flat 23.5 cents per-gallon tax by 5 cents to 18.5 cents, and index it to inflation—allowing the tax to automatically rise without a vote by the legislature.  A new two percent sales tax would be added at the wholesale level and rise to 4 percent in 2014.  O’Malley says his proposal would add an extra 2 cents per gallon this year and an extra 9 cents next year, a nearly 50 percent increase.

Also, the plan calls for, if Congress passes the Market Place Equity Act, for Maryland to tax Internet sales and direct $170 million towards transportation funding.

“It’s a doomsday scenario for members along the border,” said Kirk McCauley spokesman for The Washington, Maryland, Delaware Service Station and Automotive Repair Association.  “Along the Rt. 301 corridor it could mean a difference in 14 cents per gallon between Maryland and Virginia.”

Virginia recently passed a transportation plan that eliminates it’s 17.5 cents per gallon gas tax and replaces it with a 3.5 cents wholesale tax, along with an increase to the state’s existing sales tax, and allowing regional funding mechanisms for local transportation projects.

“Whether its at the wholesale level or the retail level,” McCauley said. “It all comes down on the customer in the end.”

A recent Washington Post poll found Marylanders overwhelmingly opposed (over 70 percent) any increase in the state’s gas tax or applying a sales tax to gasoline.

However, long time Maryland politics observer and Gazette columnist, Blair Lee believes the gas tax has good chance despite the unfavorable polls.” “The legislature has rubber stamped almost everything that O’Malley, Miller and Busch want,” Lee said.  “No matter what they do, these lawmakers keep getting reelected so they are emboldened to push the limit.”

If O’Malley’s plan does not pass in the remainder of the current legislative session, Lee believes O’Malley will call a special session to deal specifically with the gas tax.

Mark Newgent

Mark Newgent is a contributing editor to Red Maryland, the premiere blog of conservative politics in the Free State, voted one of the best state political blogs by the Washington Post two years in a row. His writing has appeared in the Baltimore Sun, Washington Examiner, National Review Online, and more. Twitter: @MarkNewgent

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