The eternal gas tax increase


This article was written by Herb McMillan and was published in the Capital Gazette.

Will Rogers once said, “The only difference between death and taxes is that death doesn’t get worse every time the legislature meets.”

The Maryland General Assembly proved Rogers’ point, voting to approve Martin O’Malley’s Transportation Infrastructure Investment Act. O’Malley’s legislation creates an “eternal” gas tax increase consisting of two parts.

The first ties the excise tax on gas, currently 23.5 cents/gallon, to the annual rate of inflation. Every July 1, the tax per gallon will increase automatically based on inflation, without any vote by your representatives.

This increase will be added to a new sales tax on the average retail cost of gas per gallon, every July 1. The sales tax increase will be phased in, beginning at 1 percent this year; reaching 5 percent by 2016.

Let us put this deliberately complicated tax formula in context, using information provided by the General Assembly’s nonpartisan Department of Legislative services.

Presuming an annual inflation of 2.2 percent and a retail gas price of $3.12, Maryland’s gas tax will nearly double, going from 23.5 cents to 45 cents per gallon within five years. This 89 percent increase would give Maryland the fourth highest gas tax in America and the highest gas tax in the Mid-Atlantic region.

Of course, this analysis presumes a best case scenario. Inflation could be far worse, and gas could be far more costly. The unprecedented coupling of an automatic gas tax increase and a new sales tax on gas creates a Frankenstein monster of a tax. It will automatically and mindlessly lumber through our state’s economy, always growing, always hungry, devouring the budgets of working families and small businesses. Your take home pay does not increase automatically with inflation or gas prices, but this tax will.

Beyond the financial pain the eternal tax will bring lies an important principle; the principle that the people’s representatives should vote every year on the governor’s budget and tax proposals. Passing legislation that raises taxes automatically, without a vote, is not only political cowardice, but an abandonment of our duty to the people.

Aside from the creation of an eternal tax, O’Malley’s proposal also fails to protect dedicated transportation funding with a lockbox. This is a critical component of any transportation bill. O’Malley’s bill also fails to align transportation spending with Maryland’s needs. This year, $1.1 billion, 46 percent of our transportation budget, will be spent on public transit, but only 8 percent of Marylanders use it to commute. Roads are funded at $660 million — only 27 percent of the budget — yet 83 percent of us use cars to commute. We’re spending half our transportation budget on 8 percent of our population.

O’Malley claims greater “investments” in mass transit will ease congestion. They haven’t. O’Malley has increased mass transit spending 30 percent over five years; yet ridership’s increased only a tenth of one percent.

Before we double gas taxes, and spend $4.5 billion to expand mass transit, we need to determine why previous “investments” have failed, and ensure roads receive their fair share of funding. Anything else puts the cart before the horse.

The legislators who voted on O’Malley’s eternal tax, could do well to keep one other point in mind. A legislator who votes for a gas tax that increases automatically owns each annual increase. Every July, voters will be reminded of a legislator’s vote to increase gas taxes. This is significant; 72 percent of all Marylanders,
including Democrats, oppose any gas tax increase. The way legislators vote on the eternal gas tax could determine where they spend political eternity.

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