Jump of 18% on July 1
Maryland’s gas tax law was a point of contention between Governor Larry Hogan and Comptroller Petter Franchot last week. The two exchanged words and called upon the other to do something about the state’s upcoming increase to the gas tax.
According to state law enacted in 2013, Maryland’s gas tax rate and future increases are tied to inflation. This year, with inflation up significantly, the rate will increase 6.6 cents per gallon on July 1. The Attorney General’s office advised the Comptroller that only the General Assembly has the authority to suspend or authorize amend the state’s gas tax rates. The presiding officers announced they will not convene a special session to take up the matter.
During the General Assembly’s regular legislative session earlier this year, NFIB strongly supported legislation that created a 30-day gas tax holiday which ran from March 18 to April 16. Since then, inflation continues to be the single most important business problem among nearly a third of small business owners according to NFIB’s most recent survey.
Unfortunately, an attempt to extend the state’s gas tax holiday by 45 days failed during the closing days of the session as no Democrats voted in favor of a Republican-led floor amendment.
State Director Mike O’Halloran had this to say during negotiations over what to do about soaring prices at the gas pump:
“Small business owners are joining the call for relief at the pump. Maryland received more than $7 billion in federal infrastructure funding earlier this year. That should more than offset any potential losses to the state’s Transportation Trust Fund from a gas tax holiday. For many small businesses, the ever-increasing costs of materials and labor as they try to recover from the pandemic is unsustainable. Unlike bigger businesses, small businesses do not have the margin to absorb such a dramatic increase in costs.”
Maryland’s new gas tax will be 42.7 cents per gallon.