Tom Warne Report, 26 May 2013
The governor of Maryland signed a bill into law this week that will result in state taxes nearly doubling at the fuel pump. Gov. Martin O’Malley approved the six-year, $4.4 billion transportation funding package to address the need for highway construction money beyond 2017. The governor initiated the bill, HB 1515, which is expected to raise about $830 million annually for transportation projects.
“We have guaranteed a sustainable transportation funding source that will support more than 57,200 jobs, create a safer, more efficient transportation network, and spur economic development,” O’Malley said in released remarks. He said the bill will make the state competitive for attracting corporate investments, growth and job creation.
Beginning July 1, new revenue will be raised through a 1 percent sales tax applied to fuel taxes at the wholesale level, which equals about a 3.8-cent-per-gallon rise for gas and diesel fuels. Eventually, this will increase to at least 3 percent, and will rise again to 5 percent if Congress does not pass internet sales tax legislation. By 2017, when the taxes have been fully implemented, the state estimates they will reach 40 cents per gallon, 16 cents higher than current tax rates. These will go up another 8 cents per gallon to 48 cents if the internet legislation does not go through.
Many projects will benefit from the new funding, including $125 million to build an I-270 interchange at Watkins Mill Road in Montgomery County.