While a 15-cent bump in the state’s gas tax may seem steep — the increase would amount to nearly 64 percent — members of the Blue Ribbon Commission on Maryland Transportation Funding were divided on how much of the burden the state’s drivers would bear.
The state’s 23.5-cent gas tax is assessed at the wholesale level. (This is, incidentally, why a local gas tax would be problematic, because gas stations in one jurisdiction may buy fuel from dealers in another county.) And the 15-cent increase per gallon recommended by the commission would also go to the wholesale price in 5-cent bumps over three years.
“Fifteen cents added on to the price at the wholesale level may translate to 5 or 6 cents at the pump because retailers take in a whole variety of factors,” said Del. Tawanna P. Gaines, D-Prince George’s.
Beverley K. Swaim-Staley, the state’s transportation secretary, agreed. She added that her department monitors fuel costs in Maryland and elsewhere and sees fluctuations that go beyond the difference in state’s gasoline taxes. (Here’s a map of state gas taxes with the 18.4-cent federal tax added in. And here are the diesel taxes.)
Some commission members said the gas tax hike would be eaten by oil companies, but others expressed doubt that the Exxons of the world would eagerly shoulder the burden.
“There’s not a direct pass through … but over a long period of time it’s definitely reflected at the pump,” said Lon Anderson, director of public and government information for AAA Mid-Atlantic.
Don Bowman, founder of D.M. Bowman Inc. near Hagerstown, agreed.
“There’s no [fuel] dealer in this state that can absorb a 15-cent, or even a 5-cent cut to his margin,” said Bowman.
Now, more on those big, bottom-line numbers:
The commission’s goal was to suggest a funding package to bring in $870 million more a year to meet state and county transportation needs. What the commission will actually recommend, however, totals only $808 million.
The difference, according to Department of Transportation Spokeswoman Erin Henson, will come from the gas tax. After three years of 5-cent hikes, the gas tax would be indexed to inflation and eventually climb high enough to meet the commission’s goal.