Maryland Gov. Martin O'Malley has proposed a new 2 percent sales tax on gasoline as part of a proposed transportation plan aimed at generating $3.4 billion for highway and transit projects over the next five years and supporting 8,800 jobs each year.
O'Malley's initiative would raise an average of $800 million each year.
The governor has proposed getting to this increase by reducing the state tax on gas by five cents, then imposing a 2 percent sales tax on the wholesale price of gas starting July 1; the sales tax will increase to 4 percent on July 1, 2014, setting next year's overall tax increase at seven cents. O'Malley pointed out during a press conference that there are 18 additional states currently considering such revenue-generating actions. Wyoming increased its tax by 10 cents in 2012.
The current state tax on gasoline hasn't been increased from its current level of 23.5 cents since 1992.
“Building a 21st century transportation network won’t happen by itself. We cannot afford the cost of inaction," O'Malley said during a press conference announcing the initiative. "This plan will help us generate the revenue we need to ease some of the worst traffic congestion in the nation while building and repairing our transportation infrastructure."
The transportation department will also receive a portion of the revenue from the federal government's Marketplace Equity Act, when passed. The new law would allow states to impose taxes on Internet sales. Finally, the state treasury will issue bonds for federally mandated environmental projects.
A working group will also be created to recommend funding projects for local transportation initiatives. - Jon Ross