Maryland’s top legislative leaders said Wednesday that the state cannot afford to miss out on $200 million in new funding for roads, bridges and transit projects provided by an upcoming automatic increase in the state’s gas tax, effectively guaranteeing higher pump prices starting July 1.
The decision followed calls from other top state officials in recent days for the General Assembly to hold an emergency special session to address the tax, which is tied to inflation and will increase about 7 cents per gallon as drivers are watching gas prices climb to record levels.
The change will push the tax from around 36 cents to about 43 cents per gallon. The average price of a gallon of regular gas Wednesday was $4.60 both in Maryland and nationally, according to the automotive group AAA.
House Speaker Adrienne Jones and Senate President Bill Ferguson said the problem is not the “marginal impact” of the increase. “The problem is big oil companies exploiting global uncertainty to drive the price of gas to more than $4 a gallon,” they said in a joint statement.
Lawmakers passed a 30-day gas tax holiday in March but failed to come to an agreement on extending it or on altering the law tying the tax to inflation. Jones and Ferguson on Wednesday also rejected calls for another such holiday, which they said would have “long-term consequences” for critical infrastructure.
“As fuel prices rise, so too do the costs of maintenance and construction in our transportation sector,” they said. “Ensuring the safety and integrity of Maryland’s roadways, bridges and transit systems is critical. We cannot have a reliable transportation network that regularly experiences failing conditions due to insufficient funding and deferred maintenance.”
Earlier in the week, Gov. Larry Hogan and Comptroller Peter Franchot sparred publicly over which of them had the authority to prevent the gas tax increase, which Franchot said will be 6.6 cents per gallon.
The comptroller asked the governor to declare a “State of Energy Emergency” and the governor told the comptroller to unilaterally “use every legal and regulatory power” he had to “halt or minimize the impact” of the increase.
While Franchot had said he still was reviewing his options, he later said that after an “exhaustive review” his agency’s lawyers concluded he lacks legal authority to “halt or suspend the automatic increase to the motor fuel tax or any tax rate.”
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“Simply put, if I was legally able to prevent the motor fuel tax increase from going into effect, I would have done so already,” Franchot, a Democrat running for governor, wrote in a letter.
He put the pressure instead on the Democratic-controlled General Assembly — telling them to suspend the increase for one year and also pass another bill for a second gas tax holiday, this one lasting four months.
“This amounts to a new, highly regressive $200 million tax on Maryland families and small businesses,” Franchot wrote.
The state General Assembly’s normal three-month session ended in April, meaning lawmakers would have to come together for a special legislative session in Annapolis to make any further changes. Faced with calls to extend the tax holiday toward the end of the regularly scheduled session, Democrats also had argued against it while citing the impact on funding.
Several other states have taken measures to cut gas taxes, either temporarily or for extended periods of time. New York state suspended its 16-cents per gallon tax from June 1 through the end of the year. Florida suspended its tax for the month of October, which will save save drivers about 25-cents per gallon during the month before the November election, according to the Tampa Bay Times.
Franchot said the historic $7.5 billion state budget surplus could absorb the lost revenue that comes from the tax, which pays for road and transit projects through the state’s transportation trust fund.
The law the General Assembly passed to kick-start the gas-tax break in March included nearly $100 million for the lost revenue.