Tuesday, January 29, 2008

Do We Need A Gas Tax Increase? Part 2

From Marc Korman: In my first entry on this issue background was given on the gas tax itself and the perceived need for an increase. This has led to a number of proposals at the federal, state, and local levels to increase the gas tax.

Nationally, the National Surface Transportation Policy and Revenue Study Commission just proposed a 40 cent increase in the federal gas tax in their report. As a former Congressional staffer, I have heard members of the House Transportation and Infrastructure Committee from both sides of the aisle repeatedly discuss the need for a gas tax increase.

At the state level, Governor O’Malley proposed a half cent increase to the gas tax and a peg to construction inflation during last year’s Special Session. This was not included in the final package that was passed. As noted on a recent blog entry here at MPW, Senate President Miller has also previously proposed an increase in the gas tax of 12 cents a gallon. This session, Senator Rob Garagiola from right here in Montgomery County has proposed to increase the gas tax by 3 to 4 cents in July and 3 to 4 more cents next year, though this is an effort to repeal the computer services sales tax, rather than invest the revenue raised into transportation.

Locally, the Working Group on Infrastructure Financing for County Facilities proposed that the County seek state authority for a local gas tax of 15 cents a gallon, though this idea has not gained much traction with the County Council. Ike Leggett has also promoted an increase in the gas tax, though he has suggested it as a state, not just local, initiative.

Of course, there is opposition to a gas tax increase all across the political spectrum. In the dissent to

the National Surface Transportation Policy and Revenue Study Commission, Transportation Secretary Mary Peters and two other Bush appointees to the Commission opposed an increase in the gas tax, which I believe is largely philosophically based. Progressive Maryland has also expressed concern with an increase because the gas tax is regressive. This is certainly true. Like the sales tax and payroll tax, a gas tax is paid regardless of economic circumstance.