Maryland House panel passes 4-cent gas tax increase

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Local,Maryland,Andy Brownfield

ANNAPOLIS - Marylanders would pay almost 4 cents more per gallon of gasoline this summer under a transportation funding proposal approved by a Maryland House panel Monday.

Marylanders could expect to pay 3.8 cents more per gallon on July 1 as the state applies a 1 percent wholesale tax on gas. One more percent would be phased in Jan. 1, 2015, with another percent being phased in July 1, 2015. The bill passed by the Ways and Means Committee would tie the current 23.5 cents- per-gallon gas tax to inflation, but would not reduce it.

The House plan would phase in the tax over a longer time than Gov. Martin O'Malley's original proposal, which would have raised prices 2 cents per gallon on July 1. O'Malley's bill would have lowered the 23.5 cent per gallon gas tax by 5 cents to 17.5 cents, but then added a 2 percent wholesale gas tax on July 1, which would be doubled to 4 percent on July 1, 2014.

Gas tax plans:
House version:
» 23.5 cents- per-gallon excise tax indexed to inflation
» 1 percent wholesale tax by July 1, 2013
» 2 percent wholesle tax by Jan. 1, 2015
» 3 percent wholesale tax by July 1, 2015
» If Congress doesn't pass Internet sales tax, 5 percent wholesale tax by July 1, 2016
O'Malley version:
» 17.5 cents-per-gallon excise tax indexed to inflation
» 2 percent wholesale tax by July 1, 2013
» 4 percent wholesale tax by July 1, 2014
» If Congress doesn't pass Internet sales tax, 6 percent wholesale tax by July 1, 2016

Both O'Malley's proposal and the amended House bill rely on Congress passing a bill requiring Internet vendors to collect state sales taxes. If that doesn't happen by 2015, the House bill would add another 1 percent of wholesales tax on Jan. 1, 2016, and a final percent on July 1, 2016 -- bringing the total wholesale tax on gasoline to 5 percent.

O'Malley's bill would have added 2 percent in 2015 if the Internet sales tax doesn't pass, bringing the total wholesale gas tax to 6 percent.

House Majority Leader Kumar Barve, D-Montgomery County, said both proposals would eventually raise the money needed for the near-bankrupt Transportation Trust Fund -- $600 million annually -- but the House's version would take a bit longer. O'Malley's would have raised $3.4 billion by 2018, while the House version would raise that amount by 2019.

Barve said the committee's idea in changing the bill was to lessen the tax's impact at the pump.

"We want to phase it in as gently as we can for our constituents," he said. "We don't agree with the notion of raising one tax and lowering another."

Opponents of the gas tax say it still goes too far.

"Maryland drivers are still going to see the fifth-highest gas tax in the nation, and most of it is going to go to mass transit," said Nick Loffer, Maryland grassroots director for Americans for Prosperity. "There's no promise any of this money is going to go to roads."

abrownfield@washingtonexaminer.com

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Andy Brownfield

Examiner Staff Writer
The Washington Examiner