Top officials in Maryland are at odds over whether the state should move ahead with a scheduled gasoline tax hike just a few months after agreeing to suspend the tax altogether temporarily in an effort to relieve drivers.
Senate President Bill Ferguson and House Speaker Adrienne Jones, both Democrats, are pushing back against Republican Gov. Larry Hogan’s bid to stop the 18% tax increase and warn of “long-term consequences” associated with gas tax holidays, which a number of states have entertained as a solution to record-high fuel prices.
Both lawmakers co-sponsored legislation in March to suspend the state’s 36.1-cent gasoline and 36.85-cent diesel taxes for 30 days, which Hogan signed, but they now emphasize that Maryland’s transportation trust fund needs the gas tax revenue to support roads, bridges, and other projects.
“As fuel prices rise, so too do the costs of maintenance and construction in our transportation sector,” Ferguson and Jones said in a statement. “We cannot have a reliable transportation network that regularly experiences failing conditions due to insufficient funding and deferred maintenance.”
Ferguson and Jones downplayed the “marginal impact” of the increase, which will raise the per-gallon tax from 36 cents to 43 cents, and blamed oil companies for “exploiting global uncertainty” to push prices higher, as congressional Democrats have done.
State law requires the comptroller to adjust motor fuel tax rates each year, accounting for inflation.
Hogan recently asked Democratic Comptroller Peter Franchot, who is running to replace Hogan, to use his authority to prevent the increase from becoming effective on July 1.
Hogan, who signed the monthlong gas tax holiday into law in March and had pressed the General Assembly to go further, called the pending tax increase “unconscionable” at a time of record prices.
Franchot, who endorsed the recent gas tax suspension, wrote back to say he and state Attorney General Brian Frosh agree that he lacks the authority to suspend the increase but that he would do so for a year if he were given it.
“One thing is for certain: the executive and legislative branches have unquestionable authority” to prevent the tax hike, Franchot told Hogan, urging the governor to call a special legislative session to take up the matter.
The average price for gasoline in Maryland is $4.58 per gallon as of Friday, according to AAA, with prices highest in the counties surrounding Washington, D.C.
Meanwhile, the U.S. national average just set a new record of $4.60 per gallon on Thursday. On the same day, Georgia Gov. Brian Kemp, who approved a gas tax holiday back at about the same time as Hogan, ordered an extension to the suspension through July 14.
Some analysts have come out against such measures, arguing they enable demand to grow stronger, thereby tightening supply further and driving prices up.