30-day gas tax holiday fast-tracked by Md. lawmakers

ANNAPOLIS — A bill providing temporary relief at the gas pump heads to the full House and Senate on Wednesday.

The 30-day pause on collecting the state’s 36-cent gas tax, introduced last week, is moving at light speed. Lawmakers hope to send it to Gov. Larry Hogan before the end of the week.

Pocketbook issues are quickly commanding attention in Annapolis as historic inflation and the Russian invasion of Ukraine are stretching household budgets.

“We all know how important this is,” said Sen. Guy Guzzone, D-Howard and chair of the Senate Budget and Taxation Committee. “We all know the tragedies that are occurring around the world, the effect that they’re having on our gas prices. We know our constituents all across the state are seeing an increase, a very unfortunate increase in the cost of gas.”

The bill as passed by both committees provides for a 30-day holiday on the 36-cent excise tax on gas. An amendment to both versions provides for a rebate to stations on gas they already have on hand to allow those stations to participate immediately. That same amendment will impose a retroactive tax on gas on hand when the tax holiday expires.

Hogan said Tuesday morning, prior to the votes, that he would be open to extending the holiday beyond 30 days.

“I’m not convinced it’s going to be solved in 30 days,” Hogan told reporters. “I actually would prefer longer, but that’s where we are with the compromise agreement with the legislature. It’s going to be 30 days, and we’ll have to see.”

The House Ways and Means Committee rejected an amendment that would have extended the holiday to 90-days by a 12-11 vote.

The General Assembly wraps up the 90-session on April 11. If the proposed bill passes without some form of extension, the tax would go back into effect around the Easter holiday and spring break season.

“I did think about us ending the session but if it’s a big enough issue, if we’re in a position where we need to extend it further, we can always come back for a special session,” said Del. Steve Johnson, D-Harford and sponsor of the House version.

The proposal is moving through both chambers quickly since a 90-day holiday was first proposed Thursday by Comptroller Peter Franchot.

Hogan, House Speaker Adrienne Jones and Senate President Bill Ferguson quickly reached an agreement on a 30-day pause.

“This is going to be a big help. It’s going to save consumers $150 million at the pump,” said Hogan.

Over that period, a  motorist driving a car with a 15-gallon tank would save a little more than $5 on a fill-up or about $22 for the month if filling up weekly.

Del. Vanessa Atterbeary, D-Howard and chair of the House Ways and Means Committee, said the pause on the gas tax “will provide quick savings to Marylanders facing rapidly rising gas prices.”

But the tax holiday comes at a cost and the holiday couldn’t last indefinitely, Hogan acknowledged.

“I think this is great that we’re able to have this bipartisan agreement with our friends in the legislature in the Senate and the House to put a pause on this gas tax,” the governor said. “But it’s somewhere around roughly $150 million a month in revenues, so it affects other decisions.”

The Department of Legislative Services estimates the transportation trust fund would receive about $100 million less for a 30-day break in the tax.

Not everyone supports the pause.

Representatives of the Maryland Transportation Builders and Materials Association said the proposal would decrease revenues earmarked for highway projects.

A law passed more than a decade ago created a lockbox to ensure gas taxes would be used for roads projects.

Michael Sakata, president of the association, said the pause on the gas tax creates a “backdoor” that defeats the purpose of the lockbox. Instead, the association called for a 2-cent reduction in the state sales tax.

The legislature is already planning to replace the nearly $100 million in reduced gas tax revenues using the more than  $7 billion in the state’s budget surplus announced last week.

Guzzone said the Senate version of the budget already accounts for that transfer.