Increasing Gas Tax Talks

Over the past several months I have seen several stories on what is being proposed in the state legislature this year: an increase on the gas tax, among other things, to fill a budget hole. I thought it would be a good idea to share some interesting facts that I have found through researching this topic.

First thing is first, the price of gas has increased faster over the past several months. The national average is $3.721. Maryland's current average is actually lower at $3.698. In Odenton, the average is $3.69 with the cheapest gas on the eastern side of Odenton.  In a three week time frame Maryland's gas average has jumped 10 cents. The political issues happening in Iran may continue to affect the price of gas across the area. The news that broke recently that Iran is not disclosing all information about their nuclear program at a military base has made Americans concerned about the future between the two countries and wondering where gas prices will end up by summer time.

What is the breakdown on the taxes that you pay for gas in Maryland?  Drivers who gas up in Maryland currently pay 23.5 cents a gallon in state taxes and 18.5 cents in federal taxes. If we take that into effect a gallon of gas without taxes right now would cost roughly $3.23. One proposal in the state legislature would raise the Maryland state gas tax by as much as 15 cents. This would push the state tax up to 38.5 cents. 

Now to the ugly news....what does the 15 cent gas tax per gallon means for the state. Maryland drivers would shell out an extra $250 a year. Base on Maryland's population in July 2011, the state could look at $1.4 billion in revenue would be a little more than 1/4 of the budget for the two new rail projects which will cost $4 billion. 

Now the worst news.....many jobs could be lost by an increase in the gas tax. This would be caused by higher transportation costs. Many of us have become comfortable with what our grocery bill has been recently. If the gas tax increases by 15 cents, consumers could see a double tax happen. Consumers could see an increase in shipping costs due to the higher gas tax. This is known as a "Double tax." 

Now is a bad time to increase taxes on gasoline with the price of a regular gallons of unleaded gas reaching $4.00. It has been 20 years since the gas tax was increased in Maryland. The increase in this tax could spell trouble for consumers but spell success to the state to replenish the state's transportion fund which has been used for other non-transportation needs in past administrations. It also could help improve the state's transportation system which needs at least $800 million a year for improvements, according one commission.