New Gas Tax? Here's Why MD Could Pay More At The Pump: Report

ANNAPOLIS, MD — Several mid-Atlantic and northeastern states, including Maryland, are mulling over a cap-and-trade plan that could see drivers paying more at the pump. The states would direct the revenues from the plan toward mass transit projects designed to reduce carbon emissions, which may include mass transit, electric-vehicle charging and other transportation infrastructure.

The plan calls for gasoline and diesel wholesalers to pay the states for emissions allowances. Critics fear the wholesalers will simply pass the new costs directly through to consumers, and are calling it nothing more than a gasoline tax, according to Politico.

The other states invested in the plan, called the "Transportation and Climate Initiative," are Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, Maine and New Hampshire, along with the District of Columbia.

According to the Institute on Taxation and Economic Policy, Marylanders pay 36.70 cents per gallon of gasoline. That included all state and local taxes and fees as of Oct. 1.

Gasoline taxes have been a robust and reliable source of revenue for states, but the country's speedy shift into greener transportation is giving them pause. Many state legislatures are growing leery regarding the long-term viability of taxing fuel receipts as the electric car market continues to flex.

The scribes drafting TCI prefer the term "allowances" rather than tax, saying their "cap-and-invest" program would work like this:

• Placing a "cap" on carbon pollution from burning fossil fuels in the transportation sector to reduce transportation emissions.
• Requiring large gasoline and diesel fuel suppliers to hold allowances for the pollution that results from the combustion of the fuels that they sell to consumers.
• Bringing in proceeds that can be used to fund programs such as increasing public transit.

David Blackmon, an independent energy analyst/consultant, criticized the plan in a Forbes column, calling it a "regional gas tax scheme."

"Everyone involved knows that those wholesalers will pass along those costs to consumers, but the vast majority of consumers will never understand why the cost of filling their cars suddenly went up," he wrote. "They'll just see a higher cost at the pump and — conveniently, for the governors involved — most will just blame it on that evil conspiracy by 'big oil' to make those 'windfall profits.' "

The states see it as nothing quite so sinister, and Maryland officials haven't approved increased taxes.

In mid-October, Gov. Larry Hogan's administration released a Clean and Renewable Energy Standard plan focused on increased solar and nuclear energy to cut the state’s greenhouse gas emissions, along with increased transit ridership and electric vehicle sales.

Officials say the plan would cut emissions of planet-warming gases 44 percent below 2006 levels by 2030, the Baltimore Sun reports. State law, which set a 2018 deadline for the plan, established a 40 percent target for the reductions.

Key elements of Maryland's draft plan include:

• Required 100 percent clean electricity by 2040
• Expanded investment in public transit, upgrades of half of the state’s transit buses to clean power, and, potentially, the regional Transportation and Climate Initiative’s “carbon cap-and-invest” program
• Continued participation in the Regional Greenhouse Gas Initiative, the market-based program to reduce greenhouse gas emissions from power plants
• Programs to phase out the use of hydrofluorocarbons (HFCs), greenhouse gases that are significantly more potent than carbon dioxide, and to better identify and reduce methane leaks in the energy sector
• Enhanced healthy soil initiatives, through which farmers can make significant contributions to climate change goals by sequestering carbon
• Increasing the energy efficiency of buildings through investments under the EmPOWER Maryland program, along with the implementation of Hogan’s executive order directing state buildings to reduce energy use by an additional 10 percent

If the states approve TCI, the 10-year program of reducing emissions would start in 2022 and continue through 2032.

Written by Rich Kirby/Patch Staff with additional reporting by Deb Belt/Patch Staff