Maryland officials seek stop to automatic fuel tax increase

Pursuit of a second fuel tax holiday is underway in Maryland to halt a scheduled tax increase.

Fuel tax rates in Maryland are scheduled to increase next month for the first time in at least three years. Specifically, the gas tax and the diesel tax will increase by 6.6 cents.

The changes are due to a 2013 law that mandates fuel rates change annually based on inflation as measured by the Consumer Price Index.

On July 1, the 36.1-cent gas tax is slated to increase to 42.7 cents. The 36.85-cent diesel rate will increase to 43.45 cents.

At a stalemate

State House Republicans have called for a special session to address the upcoming fuel tax increase. They want a 90-day tax holiday.

Democratic state leadership says a suspension of the tax increase would result in $200 million in lost revenue for roads, bridges and transit. They say another tax holiday would have “long-term consequences” for the state’s transportation network.

In Maryland, the governor can call a special session at the request of the majority from each chamber to address an issue.

With that option appearing to be out the window, Gov. Larry Hogan and Comptroller Peter Franchot have each called on the other to take action to halt the tax increase.

Hogan, a Republican who is term-limited, asked the comptroller to “use every legal and regulatory power” to put a stop to, or at least minimize, the increase. He cites the comptroller’s responsibility for calculating the tax increase as the authority to make changes.

Franchot, a Democrat who is running for governor, says he does not have authority to nix the automatic tax increase. Instead, he is calling on state legislators to convene an emergency session to get a deal done that would allow him to suspend the tax increase. Without him being granted authorization, the increase will proceed as scheduled.

“I lack the statutory authority to halt or suspend the automatic increase to the motor fuel tax or any tax rate,” Franchot wrote in a letter to Hogan and legislative leaders. “Simply put, if I was legally able to prevent the motor fuel tax increase from going into effect, I would have done so already.”

Franchot said the state’s 7.5 billion budget surplus should be tapped to cover the revenue lost via a tax holiday.

One-month tax holiday

The Maryland General Assembly and governor acted in mid-March to provide temporary tax relief at the pump.

A 30-day suspension of the state’s 36.1-cent gas tax and 36.85-cent diesel tax concluded April 16.

A legislative effort to extend the tax holiday was rejected at the statehouse. Revenue needed for transportation work was cited for rejecting the extension. LL

More Land Line coverage of news from Maryland.