MD. Governor Supports Sales Tax on Gasoline

Maryland Gov. Martin O'Malley said Monday he supports levying a 6-percent sales tax on gasoline, phasing it in by 2-percent a year.
 
The state already levies a 23.5-cent gas tax, and the sales tax proposal would be on top of that to generate new revenue for transportation infrastructure needs.
The O'Malley administration said the proposal would raise the price of gas by about 6-cents a gallon in the first year, 12-cents in the second year, and about 18-cents in the third year.
 
O'Malley, a Democrat, said during an interview on WTOP Radio that he believes the best option for raising the money is to move away from the flat gas tax, which was last raised in 1992, and end a sales tax exemption on gasoline.
 
O'Malley said the main problem is that the state's gas tax has not kept up with inflation and needs. If Maryland had indexed the gas tax back in the 1990s to keep up with inflation, the state would likely have another $4 billion to invest in infrastructure, the governor said.

O'Malley said the proposal would include a way to put the brakes on the increase, if gas prices happen to spike in a particular year, but he did not elaborate on how that would be done.
 
The governor also said he would support legislation requiring additional money raised by the sales tax to be used only on transportation. The governor has been widely criticized for shifting money away from transportation needs in recent years in order to fill budget gaps resulting from the recession and its aftermath.
 
O'Malley said legislation for the gas tax increase will likely be introduced shortly after his State of the State speech on Wednesday.