DALLAS — Maryland Gov. Larry Hogan's plan to halt mandated increases in the state gasoline tax would cut revenues from a 2013 tax package by almost $3 billion, which opponents said would threaten the state's ability to fund planned transit and highway projects.
Bills introduced earlier this month in the Maryland General Assembly at Hogan's request would forego the remaining increases in a new state sales tax on gasoline and end the mandate for annual inflation-based increases in the state gasoline tax.
A draft report by the Maryland Department of Transportation obtained by The Washington Post said collections in Hogan's tax plan would be significantly lower the $4.4 billion expected from the gasoline tax increases passed by the General Assembly in March 2013. An official report is expected from Maryland DOT by the end of March.
Hogan said he objected to the automatic tax increases in the 2013 legislation.
"Maryland citizens have the right to know when their elected leaders are taking more of their hard-earned dollars," Hogan said earlier this month when the bills, HB 583 and SB 589, were introduced in the General Assembly.
"The current law allows taxes on gas to steadily grow without a single vote," he said. "These automatic tax increases need to be repealed."
State Senate and House leaders said Hogan's gasoline tax cuts are unlikely to pass the Democratic-controlled General Assembly.
Senate President Thomas V. Mike Miller Jr., D-Prince George's County, said the governor's proposal has little chance of passage in the Senate.
"We can't repeal the gas tax," he said. "It would devastate our state."
House Speaker Michael E. Busch, D-Anne Arundel County, said there are not enough votes in the House to pass Hogan's tax proposal.
Maryland Department of Transportation said in late 2014 that there were $800 million of projects under way funded with the new revenue provided by the 2013 law.
The 2013 Transportation Infrastructure Investment Act levied a new sales tax on gasoline of 2% that is scheduled to rise to 3% on July 1 of this year.
The law stipulates that the sales tax would increase to 4% in January 2016 and 5% in July 2016 if Congress does not pass legislation allowing states to levy sales taxes on Internet sales. If a federal online tax law is passed, the sales tax on gasoline would remain at 3% with revenues from the internet tax dedicated to the state transportation fund.
The 2013 measure also linked Maryland's existing per-gallon gasoline tax to inflation, with annual increases each July.
The $4.4 billion of new revenue over six years from the transportation tax bill, which was championed by then-Gov. Martin O'Malley, is expected to generate enough money for transportation over six years to fund highway expansions as the state's share of two light rail projects, the $2.4 billion Purple Line in the northern suburbs of Washington, D.C., and the $2.6 billion Red Line in Baltimore.
The Republican Hogan won the governor's post in a November upset over Lt. Gov. Anthony Brown on a platform that favored roads over transit. He was sworn into office Jan. 21.
The state pushed back the opening of proposals from four potential private partners in the Purple Line from Jan. 9 until March to give the new governor time to review funding for the public-private partnership.
The private partner in the project is to invest up to $900 million in the project and receive a concession to operate and maintain the Purple Line for 35 years. The private partner will receive an annual availability payment of up to $200 million rather than a share of the fare revenues.
Hogan's proposed budget for fiscal 2016 allocates $312.8 million for the Purple Line and $106.2 million for the Red Line.
The Obama administration has promised $900 million for each of the rail projects through the Federal Transit Administration's New Starts grant program. The president's proposed fiscal 2016 budget provides $100 million to each.
