ANNAPOLIS — The Maryland House of Delegates voted Friday to raise taxes on gasoline sales for the first time in more than two decades.
The Housed voted 76-63 to levy a sales tax on gasoline that would amount to about 4 cents a gallon starting this July, another 8 cents by July 2015 and possibly as much as 8 additional cents by July 2016. The increases together would nearly double current taxes on gasoline, unless Congress passes an Internet sales tax measure that would provide another revenue source for transportation.
The vote sends the proposal, which has the support of Democratic Gov. Martin O’Malley and is one of the biggest and most politically sensitive issues of the current legislative session, to the state Senate.
The measure would impose a sales tax on gasoline sales for the first time beginning in July, with gradual increases to follow. It also includes a mechanism to automatically raise the tax based on inflation by linking it to changes in the Consumer Price Index.
Supporters noted that Maryland has not raised its 23.5-cents-per-gallon excise tax since 1992. Delegate Kumar Barve, a Democrat from traffic-choked Montgomery County, said that by 2016, that tax would have about 20 percent of the buying power it did when he voted for it more than 20 years ago.
“That is a substantial problem that we have to face and fix, because if we don’t, we will continue to have worse and worse transportation systems,” Barve said.
But Republican critics howled at the idea of creating an automatic mechanism to raise taxes in perpetuity. Delegate Herb McMillan, R-Anne Arundel, described it as “an unholy marriage” of a new sales tax on gasoline and an automatic gas tax increase.
“What that does is to create a Frankenstein monster — a zombie that automatically and mindlessly lumbers through our state’s economy — always growing, always hungry, mindlessly devouring the budgets of working families,” McMillan said.
Supporters, however, said transportation projects made possible by the money will create 44,000 construction jobs over the next five years.
They also say Maryland, struggling with heavily congested roads in the suburbs of the nation’s capital, needs the new revenue to stay competitive in attracting business.
Delegate Jolene Ivey, D-Prince George’s, noted that Maryland and Virginia are both vying to attract a new FBI headquarters that would bring thousands of jobs.
At its current pace, the state is scheduled to run out of money for new transportation projects after 2017.
Opponents, including some Democrats, said the tax was too regressive and would hurt the poor. Democrat Kevin Kelly joined Western Maryland Republicans Wendell Beitzel and LeRoy Myers Jr. in voting against the measure.