MD Gov. Offers Locals a Gas Tax Sweetener

Tom Warne Report, 17 February 2012

The Baltimore Sun – February 14, 2012

The governor of Maryland proposed a significant incentive for local governments in an effort to ensure support of his proposal to apply the state’s 6 percent sales tax to gasoline. The sweetener, introduced in the bill Tuesday, would partially restore local transportation funding that was largely cut off during the recession, to roughly triple the current aid for counties, Baltimore city and smaller municipalities for road projects.

In legislation announced two weeks ago, Gov. Martin O’Malley said he wants to raise $613 million annually for transportation projects by extending the sales tax on gasoline over three years. Over the three years, the gas would be increased by increments of 2 percent each year, to reach 6 percent in the third year. The O’Malley administration included a “braking mechanism” in the bill, which would delay the phased-in increase if gas prices spike.

At the current cost of gasoline, the governor’s legislation would add 18 cents per gallon once fully implemented. The proposal is expected to be a difficult one to pass by lawmakers in Annapolis.

The funding needs for state DOTs is nothing short of alarming. That said, a huge untold story is the fact that cities, towns and counties have the same or larger funding challenges as well. They will receive little relief even if a new highway bill passes some day. It’s another dimension of this problem that cannot be ignored. TW

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