INCYMI: Blair Lee: Your 86 Percent Gas-Tax Increase

"According to public opinion polls, 73 percent of Maryland residents oppose a gas-tax increase. Perhaps that’s because, according to Change Maryland, this will be O’Malley’s 33rd tax or fee increase, adding another $800 million a year to the $2.3 billion a year we’re already paying in new taxes under O’Malley."
Blair Lee: Your 86 percent Gas-Tax Increase

By Blair Lee

We almost made it. We almost got through a General Assembly session without another Martin O’Malley tax increase. But then, at the last moment, O’Malley came out with a new tax that’s larger than any of the other 32 tax hikes he’s put into law during his seven-year tenure.

O’Malley’s bill, as amended by the House Ways and Means Committee, would hike the state’s gas tax from 23.5 cents per gallon to 43.7 cents per gallon by July 2016, an 86 percent increase. It also ties our gas tax to inflation, so it will now automatically increase without any legislative action or blame.

Here’s why O’Malley’s gas tax stinks;

1. Regressive

Once again Maryland’s “progressive” lawmakers slam the poor. A gas tax hits household budgets, immediately cutting into grocery and medical necessities while penalizing low-income motorists driving old gas guzzlers more than yuppies driving hybrid Priuses.

2. Hurts Retailers

Thanks to O’Malley’s prior tax increases, the cost of tobacco, alcohol and many other items is greater in Maryland than in neighboring states. Now Maryland’s gasoline tax will become the highest in the region and fifth highest in the nation.

Shoppers aren’t stupid, especially during hard times. They’ll compare Maryland’s 43.7 cents of tax on gas to Virginia’s (10.5 cents), Delaware’s (23 cents), Washington, D.C.’s (23.5 cents), Pennsylvania’s (32.3 cents) and West Virginia’s (34.7 cents).

They’re already crossing state lines to buy cigarettes and booze. Now, they’ll fill up their tank, too, and buy their groceries and other household goods while they’re there.

Maryland is a small state within easy reach of its neighbors. O’Malley’s gas tax is going to kill retailers located near the state’s borders.

3. No “Lockbox”

All our gas taxes, vehicle registration and license fees, etc., go into a special fund (the Transportation Trust Fund), not the state’s general fund.

Transportation Trust Fund (TTF) revenues are dedicated to transportation spending only. But the dirty little secret of state budgeting is that, while the general fund is subject to the state constitution’s balanced budget requirement, the TTF is not.

That’s why state lawmakers raid the TTF to balance the general fund when revenues drop. Also, it’s easier to swipe TTF money rather than actually cut state spending. O’Malley “borrowed” $1.3 billion from the TTF and now complains that the cupboard is bare.

He’s promised to return $500 million to the TTF and never to raid it again. His gas-tax bill puts a “lockbox” on the TTF, but it should be called a “joke box” because it’s no protection whatsoever: The governor can unlock the lockbox and swipe all the new gas-tax revenue if 60 percent of the legislature’s two spending committees approve. Remember, committee membership is controlled by each chamber’s presiding officer and, as we saw with the death penalty and offshore windmills, committee members can be quickly shifted until the desired vote is achieved.

In other words, the fox can’t raid the chicken house, again, until the fox wants to.

The only joke bigger than the “lockbox” is the claim that Virginia’s recent transportation funding increase forced Maryland lawmakers to pass a gas tax to be competitive.

If Maryland lawmakers gave a damn about business competitiveness, we’d copy Virginia’s right-to-work, low-tax and business-friendly policies. Maryland’s sudden concern about Virginia is just Maryland’s excuse for raising another tax.

4. Spending Disparity

Currently only 28 percent of Maryland’s transportation budget is spent on roads and bridges, while 46 percent is spent on mass transit, which is used by only 8.8 percent of Maryland’s commuters.

Most of O’Malley’s new gas tax will, likewise, go to mass transit, where riders only pay 28 percent of the operating cost in Baltimore and 58 percent in the D.C. suburbs. Also, instead of roads and bridges, we’re going to build two new light-rail lines: Baltimore’s Red Line ($2.5 billion) and the D.C. area’s Purple Line ($2.2 billion), whose combined operating costs will be $120 million a year.

O’Malley’s gas-tax bill further skews the spending disparity by eliminating the share of gas-tax revenues that’s supposed to go to local governments for local roads and bridges.

According to public opinion polls, 73 percent of Maryland residents oppose a gas-tax increase. Perhaps that’s because, according to Change Maryland, this will be O’Malley’s 33rd tax or fee increase, adding another $800 million a year to the $2.3 billion a year we’re already paying in new taxes under O’Malley.

So, will this huge, regressive, unpopular, inflation-indexed gas tax pass? Of course. You see, most of the gas-tax increase doesn’t phase in until after next year’s state elections; the gas tax can’t be taken to voter referendum (because it’s a money bill); and O’Malley and the legislative leaders are busy buying off Baltimore and Prince George’s lawmakers with spending handouts.

Baltimore city is trading its gas-tax votes for $20 million a year for the next 30 years in state school construction funds. Prince George’s is trading for a $1 billion state-funded hospital. And Montgomery’s lawmakers are voting for the gas tax, which will hit their county hardest, because it’s the right thing to do!

You see, the dummies from Montgomery honestly believe that the federal and Maryland governments will spend $4.7 billion building two light-rail projects, simultaneously. No way.

And which project do you guess will actually get built and which will get delayed, forever? Wanna make any bets?

Meanwhile, get ready to pay your 86 percent gas-tax increase.