Franchot, who holds one of the few elected comptroller positions in the country, has a feel for hot-button issues. He first launched a probe into high gas prices last summer when prices zoomed past the then-stunning level of $3 a gallon.
The comptroller has focused on "zone pricing," in which wholesalers charge higher prices to some retail gas stations than to others. The price disparities can be significant between different areas of the state. According to GasBuddy.com, a price-tracking Web site, a Crown station in Park Heights charged $3.89 a gallon yesterday, while a BP in Mid-Town charged $4.15.
Oil companies contend that geographic differences are based on what the market will bear. They have resisted divulging information about pricing that they consider proprietary.
"It's a consumer rip-off, and it's been protected from public scrutiny by the industry," Franchot said. "Industry claims there is a proprietary software that justifies this, and we are going to get to the bottom of that."
Thomas A. Firey, a senior fellow at the Maryland Public Policy Institute, said that efforts to get around zone pricing by requiring that wholesalers set one statewide price would backfire because they would simply set the price higher. He said the reasons for price disparities are the same ones behind higher grocery prices in urban stores - the cost of land and rent is more in certain areas, and the degree of competition varies.
States are limited in their ability to regulate gas prices by a Supreme Court decision. But Franchot's office has indicated another legal avenue might be to examine whether discriminatory factors are used to determine prices.
Meanwhile, Franchot's office has been fighting with companies doing business in Maryland that he contends illegally avoided the state's corporate income tax by funneling profits to subsidiaries in Delaware. In 2003, the Maryland Court of Appeals sided with the state. Franchot's predecessor, William Donald Schaefer, instituted an amnesty program and then filed lawsuits against several other companies. Franchot has expanded on those efforts.
In April, the Maryland Tax Court ordered clothing retailer Talbots Inc. to pay $1.1 million in back taxes. A decision in another case with retailer Nordstrom Inc. is expected next month. In all, Franchot said he expects the cases to yield $145 million in unpaid taxes.
"Currently Maryland is one of the more aggressive states on this issue," said Stephen J. Blazick, an attorney at the Reed Smith law firm in Philadelphia who has represented companies that have employed the contested corporate structure. "Franchot has taken a stand that these companies are subject to tax in Maryland and this was a tax scheme."
laura.smitherman@baltsun.com
ONLINE
Find more state political news at baltimoresun.com
/politics
