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Renewed push for state gas tax holiday extension days before next hike

Gas Tax Holiday Maryland
Zshekinah Collier
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The average price of gasoline is $5 per gallon in Maryland, up from about $3 per gallon one year ago.

Marylanders already reeling from high gas prices will soon see a bigger price spike at the pump. The state gas tax is slated to increase by 19.4 percent on July 1.

That will add to the financial burden for many residents, like Monica Lindsey.

“Gas is expensive. I'm trying to fill up half a tank instead of a whole tank,” Lindsey said while pumping gas in Baltimore. “I'm just trying to figure out the best way to maximize my miles.”

State leaders already approved a 30-day pause on gas taxes in mid-March which ended in mid-April. But there’s been no Special Session scheduled to take up the issue since then.

Earlier this week, Democratic President Joe Biden and Republican Gov. Larry Hogan pushed for a federal gas tax holiday. But that would take an act of Congress.

Maryland gubernatorial candidate and the state’s current comptroller Peter Franchot echoed that sentiment for federal relief and an extension of the state gas tax relief.

Residents across the state are spending 20 percent of their monthly income at the pump, according to the Comptroller’s office. If both the federal and state governments institute gas tax holidays, the nation could avoid a deep recession, he said.

“If Congress can get its act together and the legislature does the right thing, Maryland families and small businesses can save over $550 million from the federal and state gas tax over the next three months, '' said Franchot.

The average cost of regular gasoline across Maryland is $5 per gallon compared to about $3 just a year ago, according to AAA data.

GASBuddyChart20192022.JPG
Kristen Mosbrucker
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Gas prices in Maryland were averaging less than $1.75 in April 2021 and have since risen to $5 a gallon, according to GasBuddy.

Some families are being forced to choose between a gallon of milk or gas amid record high inflation for food. The state gas tax will increase from 36 cents to nearly 43 cents per gallon.

The automatic gas tax hike is tied to inflation and generates revenue for the Maryland Transportation Trust Fund used to finance the maintenance of roads, highways and mass transportation systems throughout the state.

Pastor Rodney Hudson of Baltimore’s United Methodist Church has seen the effects of higher gas prices first hand as community members have been asking for assistance and support from the church.

“People are suffering and more people are being placed in homeless situations,” Hudson said.

Beyond gas tax relief, the state government should cut 475,000 emergency survival checks of $2,000 each for low-income residents, Franchot said. The goal would be to help vulnerable groups like seniors with fixed incomes, essential employees and low wage workers with gas, rent, and groceries.

Democratic Senate President Bill Ferguson and House Speaker Adrienne Jones released a joint statement about the gas price situation, but declined to support a state tax relief extension.

"States cannot unilaterally bear the burden of increased gas prices driven in part by Putin's aggression in Ukraine and in part by the corporate greed of oil companies bringing in record profits,” according to the statement.

In March, Democratic leaders weren’t convinced that eliminating the inflation adjustment on wholesale gas in the state would lead to a significant price drop at the pump while losing $200 million in funding for transportation.

GasTax.jpg
Zshekinah Collier
/
The price of gas across Baltimore has forced some residents to choose between transportation and food.

There’s some skepticism among economists that pausing the collection of the 18 cent federal gas tax would change prices at the pump. Profits for oil refineries are the difference between the price of crude oil and the price of gasoline, which means changing the tax on consumers doesn’t affect the refinery’s costs.

Maryland House Republicans pushed for a Special Session to resume the gas tax holiday and stop the automatic increase.

“Leaders at all levels of government and across the political spectrum see the suspension of gas taxes as a way to help citizens cope with rising gas prices. The time to do this is now,” according to a statement from the Maryland House Republican Caucus.

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