GOP effort to insert gas tax cut into baby products bill fails

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ANNAPOLIS — A Tuesday vote in the House of Delegates on a bill to eliminate taxes on some purchases for babies turned into a skirmish over the state’s gas tax. 

Legislation that would result in a lower gas tax sponsored by House and Senate Republicans remains stuck in committee. So House Republicans Tuesday attempted to force the issue by proposing to amend a bill that would exempt baby bottles, baby bottle nipples and infant car seats from the state sales tax. 

“Inflation last month was at 7.5%,” said Del. Matt Morgan, R-St. Mary’s. “The prices are going up. If we’re going to cut taxes for Maryland families, I think it starts at the gas pump. I think they’d really appreciate that.” 

Morgan is the lead sponsor of a bill that would decouple automatic increases in the state gas tax. Those increases, implemented each July, are tied to the rate of inflation set by the Consumer Price Index. 

Democrats, however, called on colleagues to reject Morgan’s amendment because his bill remains before the House Ways and Means Committee. 

“This is not the time to make a decision about a different tax, completely unrelated to the bill before us,” Del. Jessica Feldmark, D-Howard and Baltimore counties and floor leader on the bill. “This bill is about helping families deal with the financial costs of having a newborn baby. This is about very specific, targeted relief. There is no relation to the motor fuel tax, and this shouldn’t be part of this discussion.” 

The House ultimately rejected Morgan’s amendment on a mostly party-line vote of 50-83. 

Republicans have previously sought to decouple the tax from the inflation index. Historically, midterm elections typically tend to favor the party not holding the White House. Maryland Republicans hope to make political hay out of the issue.

The fate of Morgan’s bill and the version in the Senate are likely dim. 

In 2018, a similar bill in the House was killed by the House Ways and Means Committee. Measures in 2015 and 2016 died in House and Senate committees with no vote. 

The issue has received more attention as inflation rates have soared.

Prior to the pandemic, inflation ran about 2% annually.  But in the last year, that rate has steadily increased. In January, the Bureau of Labor Statistics reported the Consumer Price Index increased 7.5%. The increase in inflation is currently the fastest in four decades. 

In 2013, the General Assembly approved a 20-cent increase to the gas tax phased in over three years. A politically difficult move, it was the first such increase in more than two decades. 

In an effort to avoid having to revisit the issue, lawmakers at the time baked in a provision linking future increases to the federal Consumer Price Index. 

Currently, motorists in Maryland pay a tax of 36.1 cents per gallon. 

Future increases are set annually by the Office of the Comptroller based on the rate of inflation. The increase is capped at 8%, a rate that Democratic lawmakers in 2013 thought unimaginable and would reflect a crisis such as another major terror attack. 

Legislative analysts reviewing Morgan’s bill estimate the gas tax will increase by about $37.5 million or 4.5%  on July 1. Future increases in fiscal years 2023-2027 range between 2.3% and 2.6%. 

Republicans believe those estimates are low. 

Del. Chris Adams, an Eastern Shore Republican, called Morgan’s bill “an off-ramp.” 

“We know inflation is at all-time highs,” Adams said.