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O’Malley’s Transportation Plan-One Big Middle Class Tax Hike

50% Gas Tax Hike

March 5, 2013

Governor O’Malley finally introduced his transportation funding plan for the 2013 General Assembly late Monday evening.  The plan is a recycled version of the plan he introduced  last year, a massive 6 percent sales tax hike on gasoline, but added three new caveats.

  • The sales tax would be phased in by 2 percent every year until 2015.
  • If Congress passes the Marketplace Fairness Act or the Internet Sales tax, O’Malley’s bill would expand the state sales tax to Internet sales.   The sales tax on gas would then only increase to 4 percent  by 2014
  • The base gasoline tax of 23.5 cents per gallon would be reduced 5 cents to 18.5 cents, but allowed to rise based on inflation.

Once fully implemented, Marylanders would still be burdened with a 50 percent gas tax hike.

O’Malley’s 6 percent sales tax plan was rejected last year by Maryland and went nowhere in the legislature.  A recent Washington Post poll showed scant support for a gas tax hike with only 26 percent of the state supporting such a measure.

O’Malley’s new proposal continues the talk of a “locked box” provision to the Transportation Trust Fund (TTF).  Drivers in FY-2013 contributed 49 percent of the money to the TTF but only received 30% back for road construction and repair.  O’Malley’s bill, like Senator Miller’s bill, does not guarantee that tax dollars generated by drivers will be dedicated to roads.  Maryland drivers have no assurance from Annapolis that roads not transit will be a priority for transportation funding.

Expanding the state sales tax to Internet sales to replace 2 percent of the sales tax on gasoline is not a done deal.  With gridlock in Washington there are questions to whether or not Congress will grant states the power to enact an Internet sales tax.

With this proposal, O’Malley has chosen to push a massive tax hike onto Maryland’s middle class families.  State spending is poised to increase to a whopping $37.3 billion O’Malley has shown no political will to set priorities and live within our means.

With the Governor now pushing the gas tax hike the political game changes in the Maryland General Assembly. Will Delegates and Senators listen to the 72 percent of Marylanders who oppose increasing the gas tax or will they follow in the steps of O’Malley with another massive middle class tax hike?

Nick Loffer

Nick is the Deputy State Director for Americans for Prosperity Maryland. Prior to joining AFP in 2009, Nick worked for the Leadership Institute as a Field Coordinator after graduating Salisbury University in Maryland. Outside of politics Nick is an avid ice hockey player, boater, and BBQ connoisseur. Nick can be reached at Nick@AFPMaryland.com or 410-603-1836.

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