The Fourth of July weekend is traditionally one of the busiest travel times of the year, and it's a safe bet that a lot of Marylanders will hit the roads to Ocean City and beyond. As often happens when mid-summer vacations beckon, gas prices are up and motorists may be tempted to fume about the state's fuel taxes, which increased on July 1.
They shouldn't. If anyone wants to find a culprit for rising gasoline prices, they should look to Iraq and other suppliers and not Annapolis. Here's how much more Maryland drivers paid for a gallon of gasoline after Tuesday's tax increase: .4 cents. Not one cent, not even one-half cent but four-tenths of a penny. For the average full-size vehicle, that amounts to about 6.5 cents per fill-up, and most drivers have more than that rolling under the floor mats.
That's because the gasoline tax increase lawmakers approved last year is inflation sensitive, and the past year saw only a tiny increase in consumer prices. The result is that Maryland's tax on gasoline rose from 27 cents per gallon to 27.4 cents — which is still less than 8 percent of yesterday's total average cost of a gallon of unleaded in the state of $3.68, according to the American Automobile Association.
We mention that 8 percent because taxes used to make up a far larger share of the cost of a gallon of gasoline. Back when the gas tax was last increased prior to last year's measure (in 1992), the state tax represented slightly under one-fourth the cost of a gallon of unleaded gasoline. Funny how the big gas companies never mention that.
Here's another complaint. There's a concern that Maryland's prices will be much higher than those in surrounding states as a result of rising taxes. AAA's daily gasoline price monitor shows how misplaced that concern is, at least so far. District of Columbia residents pay an average $3.90 per gallon; Tysons Corner, Va. $3.81; Gettysburg, Pa. $3.79. At the same time, it's $3.75 in Oxon Hill, $3.73 in Rockville and $3.61 in Ocean City. Maryland's statewide average is just one penny more than the national average of $3.67.
Meanwhile, here's what motorists are getting from the higher gasoline tax: an estimated $4.4 billion in new funding for transportation projects including roads, bridges, mass transit and Baltimore-Washington International Thurgood Marshall Airport. That translates into reduced congestion, faster commuter times and less wear and tear on vehicles.
That last category, incidentally, is often overlooked. But as any drivers can tell you, this past winter's stormy weather produced a major plague of pot holes in the Northeast, and states and cities with poor road repair cost drivers as much as $800 per year in higher repair and maintenance costs, according to a 2013 report by the non-profit TRIP, which advocates nationally for transportation spending.
Maryland drivers get their roads and competitive gas prices, too. So while the gas tax remains in line with surrounding states, some major projects are moving forward including more than $100 million worth of upgrades to the Baltimore Beltway, a $64 million Dover Bridge on the Eastern Shore, a $125 million expansion at BWI and a $61 million Branch Avenue Metro Station in Prince George's County. And those are just some of the projects that break ground this year.
Mind you, the gas tax is scheduled to increase some more. In January, it may increase the equivalent of 3 cents per gallon. But if history is any guide, the impact on prices at the pump should be modest while the boost to Maryland's economy — not only in immediate construction jobs but in the long-term benefits offered by improved transportation infrastructure — will be substantial.
That's why Maryland voters should be skeptical of candidates for state office who promise to roll back the gasoline tax without explaining how they'd fill the resulting $4.4 billion transportation deficit or fund future transportation spending. It's one of the few taxes with broad support in the business community because it's good for economic development and job creation.
Congress should take note as well. The federal Highway Trust Fund is expected to go bankrupt by the end of August, and efforts so far to shovel cash to sustain it in the short-term (which have included taking money out of the U.S. Postal Service of all places) have failed. A far better fix would be to increase the federal gasoline tax which hasn't been raised since 1993 despite dramatically higher transportation costs — but that would require a level of common sense rarely found in Washington these days.
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