5th Highest Gas Tax Rate Chilling for Maryland’s Drivers and Economy
Drivers could see a 60% or higher gas tax hike under Governor O’Malley’s transportation plan thanks to a nuance in his proposal. O’Malley’s proposed gas tax hike would be applied at the retail level, not the wholesale level as the Washington Post reported. This costly tax hike will have a chilling effect on our state business climate.
O’Malley’s proposal would hike Maryland’s gas tax rate to 39.5 cents per gallon and it would become the 5th highest gas tax burden in the nation if gas averaged $3.50 a gallon per year. Maryland’s rank would continue to worsen as Gov. O’Malley proposal also ties the gas tax to inflation. Indexing the gas tax to inflation would promise drivers automatic gas tax hikes in the future without a vote from the State Legislature.
This massive new burden will ensure Marylanders who live near or work in Virginia or Delaware to fill up there where gas is more affordable. Nearby Maryland service stations will be forced to lay off employees or shut down for good thanks to this inevitable economic exodus. An Americans for Prosperity Foundation study found that increasing the gas tax would lead to a loss of over 1,200 jobs and over $250 million in economic activity.
With no signs of lower gas prices and the gas tax tied to inflation, Maryland drivers will be paying more at the pump immediately and for the foreseeable future if Governor O’Malley’s gas tax hike is passed.