More pain at the pump: Maryland’s gas tax set to increase Friday

Published on: July 01, 2022 at 6:00 am EDT

Gas prices at a Citgo on Orleans Street.

Jonathan Smith used to pay about $65 to fill up his Ford pickup.

Now, he has to pay around $82. At least twice a week.

“It’s been a struggle,” he said, gesturing to the rising number on the gasoline pump as he filled up Thursday morning at an Exxon station in Seton Hill.

Smith is a maintenance technician and has to drive for his job. His company pays some of the cost, but it’s still expensive to pay for personal and off-hours gas usage, he said.

“There’s no relief,” he said. “It’s been troublesome.”

Maryland’s gas prices have spiked from last year’s average of around $3 to the current average of around $4.80, according to AAA.

Beginning Friday, Smith — and every other Marylander — will have to pay even more. The state gas tax will increase from 36 to 43 cents per gallon.

A bill passed in 2013 by the Maryland General Assembly requires the gas tax to adjust annually “based on the percentage growth in the Consumer Price Index.” The CPI is often used to measure inflation.

Since 2013, Maryland’s gas tax will have risen 19.5 cents, AAA Mid-Atlantic spokesperson Ragina Ali said.

Before March, Maryland hadn’t seen the price of a gallon of regular unleaded gasoline rise above $4 since 2008. The average price reached an all-time high of $5.02 on June 14, Ali said. She said in an email that prices have been driven up by factors such as the war in Ukraine, high crude oil costs and seasonal demands.

In response to the high prices, the Maryland General Assembly passed a 30-day gas tax holiday in March, which went into effect on March 18. During that period, the average price of a gallon gas reached a low of $3.67 on April 15, Ali said.

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An average family was able to save somewhere between $30 to $60 over the 30-day period, comptroller spokesman Alan Brody said.

Some had called for another tax holiday ahead of the July 1 increase, including Gov. Larry Hogan, Comptroller Peter Franchot, who is now a candidate for governor, and the Maryland House Republican Caucus.

Del. Jason Buckel, the top-ranking Republican in the House of Delegates, has urged the General Assembly to convene a Special Session to pass legislation to “stop the automatic increase in the gas tax and to resume a gas tax holiday.” Hogan also called for a special session in a June 22 statement.

Buckel said this should have been done during the 2022 session, which ended in April. Legislation proposed in the General Assembly’s 2022 session to repeal or suspend the annual increases did not pass.

“I believe, and I think the majority of Marylanders believe, that it’s ridiculous, frankly, in light of the rising gas prices, the inflationary pressures that fuel costs are putting on almost every segment of the economy, for us to be raising gas taxes at the pump,” Buckel said.

Suspending the gas tax for any period of time would force the state to either backfill the Transportation Trust Fund, which receives revenues from the gas tax, or be prepared to go without the money, Brody said. Brody estimates that the state loses around $100 million each month during a gas tax holiday. In fiscal year 2021, the state collected around $1.06 billion in revenue from the tax, he said.

Buckel said the Rainy Day Fund is a possible source for that replenishment, as well as federal infrastructure funds or other sources of unused money.

Harford County Executive Barry Glassman supports Franchot’s call to hold a special session “to, at the very least, roll back this increase if not totally suspend Maryland’s gas tax for August and September,” he said in a statement. Glassman, a Republican, is running for state comptroller.

Franchot and Hogan have exchanged letters in recent months urging one another to take action.

In a May 23 letter, Hogan urged Franchot to “use every legal and regulatory power at your disposal to halt or minimize the impact of the accelerating gas taxes, and that you consider granting an extension for paying the taxes and removing penalties for unpaid tax, including the revocation of business licenses.” In a June 22 statement, the Governor renewed his call for the comptroller to “minimize the impact of the gas tax increase.”

Brody said the office does not have the authority to “just simply suspend collection of the gas tax,” and pointed to a May 25 letter from principal counsel Brian Oliner which concluded that the Franchot “has no legal or regulatory authority at his disposal to halt or minimize the taxes imposed by” two provisions concerning motor fuel tax increases.

In response, Franchot asked Hogan to proclaim a state of energy emergency “and suspend the state’s motor fuel tax until September.”

Franchot is calling for a 90-day gas tax holiday, Brody said.

Both Franchot and Hogan have also called on Congress to pass a federal gas tax holiday, which President Biden has also urged Congress to do.

But state Democratic leaders, such as Senate President Bill Ferguson and House Speaker Adrienne Jones, have pushed back against calls for a gas tax suspension.

They cited the potential loss of “over $200 million dollars in funding dedicated to ensuring the safety of our state’s roads and bridges” in a May 25 joint press release, and indicated that “temporary tax holidays have long-term consequences.”

“As fuel prices rise, so too do the costs of maintenance and construction in our transportation sector. 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,” they wrote.

In a June 22 press release, they called on Congress to take action, and said Maryland had already implemented a temporary holiday.

“States cannot unilaterally bear the burden of increased gas prices driven in part by Putin’s aggression in Ukraine and in part by the corporate greed of oil companies bringing in record profits,” they wrote.

Brandon Fleagle’s large pickup holds 30 gallons, and the soaring gas prices have been tough, he said.

“That’s $127, twice a week,” Fleagle, a mechanic, said as he filled up Thursday morning at a Royal Farms in South Baltimore.

He wasn’t aware that the Maryland gas tax would increase Friday. “I’m glad I filled up my gas today,” he said.

Melvin Haze, a driver for UZURV — a transportation service for older individuals and people with disabilities — said he feels the effects of high gas prices every day.

“I drive a lot, almost live in that seat over there,” said Haze, pointing to his car, as he filled up at a Shell station in South Baltimore.

Haze said he used to pay about $29 to fill up his tank. Now, he points to the pump display — $57.

Haze said it takes about two days of driving people to appointments to earn enough money to pay for a full tank.

“So, I have to make some money, to buy some gas, to go make some more money,” Haze said.

Haze said his company is providing an additional 4 cents per mile to drivers because of the gas tax increase, but it’s not enough, he said.

“Look at me, here’s my lunch, peanuts and water. And I’m not doing this for health reasons,” Haze said. “I’m doing this because I can’t afford the meat and potatoes. So, it really affects me.”