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O’Malley transportation plan means 87 percent tax increase at the pump

Maryland motorist will face an 87 percent increase in the fuel taxes they pay at the pump if the General Assembly gives final approval to Governor Martin O’Malley’s transportation funding plan.

The House of Delegates preliminarily approved the measure (HB 1515) earlier this week, a final vote expected today.

According to data compiled by Delegate Steven Schuh (R-Anne Arundel), when fully implemented in 2018 Marylanders will see an increase of 20 cents per gallon in what they pay at the pump.

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If passed Marylanders would pay the fifth highest gas tax in the nation.  A spokesman for the The Washington, Maryland, Delaware Service Station and Automotive Repair Association told Watchdog Wire Maryland that plan was “doomsday scenario” for its members along the state’s borders.

O’Malley’s plan to raise billions in new transportation revenue, would cut the current per gallon excise tax to 18.5 cents, but index it to inflation allowing it rise automatically, without legislative approval.  The measure also applies a 3 percent sales tax on gasoline phased in over three years.  That tax would rise to 5 percent if Congress does not approve a law allowing states to collect Internet sales taxes.  The plan does not go into effect until after 2014 elections and O’Malley completes his final term in office.

Proponents argue that the plan is similar to one passed in Virginia. However, Virginia’s plan completely eliminates its per gallon tax, where as O’Malley’s plan allows an open-ended tax increase.

Last November, state transportation officials warned that Maryland’s was running out of money to pay for new projects and pay for maintenance on existing infrastructure.  Under Governor Martin O’Malley Maryland has raided over $1 billion from the transportation trust fund to pay cover general fund deficits and pay for other spending.  According to this video from Reason.TV, even with $771 million in federal stimulus dollars, funding for transportation decreased by $90 million due to fund raids.

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Maryland transportation officials argue that those fund have been restored to the Transportation Trust Fund. However, funds known as highway user revenues, which counties use to maintain roads and bridges, has not been repaid.

Despite his claims, O’Malley’s plan does not put any of the new transportation revenue in a lock box or protect the Transportation Trust Fund from future raids.  The legislation allows for a three-fifths vote in legislative committees to divert funds from the fund for other spending.  During the floor vote, the Democratic majority in the House, rejected and amendment making the law contingent on approval of a constitutional amendment protecting the fund from future raids.

Nor will motorists be guaranteed that the additional revenue be used to pay for building new roads, maintenance and congestion relief for which it is ostensibly earmarked.  According to a report by the Maryland Public Policy Institute, a disproportionate share of transportation money goes to transit, not roads, even though transit ridership has not substantially increased.   Maryland spends 54 percent of transportation revenue on transit, while only 4 percent of all travel, and 9 percent of all commuting is done on transit.

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Mark Newgent

Mark Newgent is the editor of Watchdog Wire – Maryland, and 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. Contact: Maryland@WatchdogWire.com, Twitter: @MarkNewgent

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