Hogan's Gas Tax Plan Draws Skepticism From Democrats
Even with the price of oil slowly inching up, gas prices at the pump are still some of the lowest we’ve seen in years. But whatever it costs to fill up your tank, in Annapolis there’s a debate simmering over how much the state should add to the gas tax.
Joe Getty used to be a senator on the state’s budget and tax committee. These days, though, he’s Governor Larry Hogan’s legislative director. The Carroll County Republican went back to his old committee this week to make the case for a key piece of his boss’s agenda: Stop the state’s gas tax from going up.
Getty called the legislation a “very focused tax policy issue.” But many Democratic lawmakers see big consequences.
A couple years ago, the General Assembly raised the gas tax – phasing it in over a few years. There’s one jump left, and then that, the tax is pegged to the consumer price index, so it keeps up with inflation. Hogan’s bill stops all that. “The governor believes that we should not have that type of formulaic increase in any realm of taxation,” Getty told lawmakers.
All told, that would leave the state with $1.5 billion less to spend on transportation projects over the next five years. That raised questions about a couple of big expensive proposed light rail projects that would serve the Washington and Baltimore regions. Sen. Ed Kasemeier chairs the Budget and Tax committee:
“Don’t you think that what you’re proposing definitely limits the projected transportation program including Red and Purple lines?” Sen. Ed Kasemeier, who chairs the Budget and Tax Committee, asked Getty. “Doesn’t it inhibit those projects?”
Sen. Rich Madaleno, a Montgomery county Democrat, says there’s no question. “This is the death knell of any new transit project in the state.” Madaleno said. “You might be able to repave the beltway, replace a failing bridge, but it allows for no expansion projects, roads or transit.”
Madaleno says Hogan’s gas tax plan, added to another proposal to give more transportation money to local counties, starves the state Department of Transportation.
But Sen. Addie Eckardt says rural counties, including her Eastern Shore district, are already feeling starved. After all, local jurisdictions used to get a bigger chunk of state transportation money…until their share was cut by a third to balance the budget during the recession.
“We are suffering increasing potholes,” Eckardt said. “And if you have a lot of trucking transportation in your jurisdiction that decreases the fuel efficiency of your cars adds wear and tear to the trucks and vehicles, so that adds to the cost of doing business.”
Jim Brochin was possibly the only Democrat at the hearing who likes Hogan’s plan. He said taxes should be raised through the legislature, and people should make a case for their projects on the merits. “Say we don’t have the money, we need to raise the gas tax this many cents for this many years, or next year. Look, I get that. But to raise it in perpetuity is just irresponsible.”
Brochin said he expects only one light rail project will be built.
But the governor calls any implication that cutting automatic increases to the gas tax spells doom for any transportation projects a red herring. He blames his predecessor Martin O’Malley for raiding the transportation trust fund for non-transportation projects. And anyway, he says, he’s not repealing the gas tax, just getting rid automatic increases.
“Money is now pouring in, we’re now refunding and keeping the money in the trust fund. We’re now focused on infrastructure for the first time in a long time,” Hogan said.
Hogan also thinks cutting taxes could spur economic activity that’ll make up for the loss in revenue. But that’s an argument Rich Madaleno doesn’t buy it.
“You can’t keep cutting and assuming that revenues are going to go up. It just doesn’t work that way,” he said.
Hogan may not get the traction he needs to pass his gas tax plan. But the debate over the role of taxes is one that Democrats in Annapolis are having to take a bit more seriously, now that a Republican governor is in town.
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