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Maryland incremental gas tax hike to begin Monday

First increase set to go into effect is about 4 cents

June 25, 2013|By KAUSTUV BASU | kaustuv.basu@herald-mail.com
  • The gasoline tax in Maryland will increase by about 4 cents a gallon on Monday.
File photo

The gasoline tax in Maryland will increase by about 4 cents a gallon on Monday, part of a series of increase in the tax in the years to come to fund transportation projects in the state.

This is the first increase in the state gasoline tax since 1992.

The measure, which cleared the Maryland General Assembly earlier this year, will raise the state gas tax by 12.1 cents a gallon by July 2015.

Another increase in the state gas tax of 8.1 cents a gallon is possible in 2016, if federal Internet sales tax legislation does not pass, according to the Associated Press.

Maryland’s current gas tax rate is 23.5 cents per gallon, and the 3.8 cents increase on July 1 will take the tax to 27.3 cents per gallon.

The proposed increases are expected to bring in an additional $4.4 billion for transportation projects from fiscal 2014 to 2019.

Christine Sarames Delise, a spokeswoman for the Automobile Association of America Mid-Atlantic region, said that the gas price for a vehicle that gets an average of 21 mpg and is driven 12,000 miles a year would increase by about $21.60 a year in costs due to next week’s hike.

“The state tax rate almost doubles down the road ... and the expenses will be higher,” Delise said.

She said that the state gas tax increase comes at a time when gasoline prices are trending downward.

The average price of a gallon of regular unleaded gas in Maryland was $3.50 a gallon Tuesday, down 2 cents a gallon from a month ago but up 15 cents from the same time last year.

“Gas prices typically continue to decline around this time after July Fourth,” Delise said.

West Virginia’s average gas prices are at $3.59 a gallon, while Pennsylvania’s average gas prices for unleaded regular gasoline is $3.51 a gallon.

Kirk McCauley, director of member relations for the Washington, Maryland, Delaware Service Station and Automotive Repair Association, an organization that represents 800 gas stations in the state, said the “first increase won’t be bad, but then it is going to get worse and worse.”

He said some gas station owners might decide to lose money by not increasing their prices.

“As far as Western Maryland, you won’t be in too bad a shape right now,” McCauley said.

But for gas stations in the state near the Virginia border, the increase in the gas tax was going to be “catastrophic,” he said.

Virginia’s per gallon tax is being replaced by a wholesale gas tax beginning July 1, and that likely will reduce the price of a gallon of gas by about 6 cents, according to a rough estimate by the AAA.

The average price of a gallon of regular unleaded gas in Virginia currently is $3.40 a gallon.

Brien Poffenberger, president of the Hagerstown-Washington County Chamber of Commerce, said that it wasn’t only the price of gasoline that would go up.

“Not only is there an impact on the pump, but there is an impact on other businesses — commercial vehicles, delivery trucks,” he said. “Of course, it depends on what part transportation and its costs play in a business.”

He said the larger picture is Western Maryland’s disconnect with Annapolis, and how policies and goals pursued there, such as mass transit projects, do not benefit the Washington County area.

“Is it (the revenues from the gas tax) used for transportation that we benefit from?” Poffenberger said.

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