Md. gas tax: The cost of doing nothing

Our view: Raising the gas tax at a time of soaring fuel prices may seem unwise, but it's actually the responsible choice

March 10, 2011

With Libya in turmoil and the volatile oil market threatening a return of $4-a-gallon gasoline prices this summer, Maryland consumers are probably not anxious to hear any plan that might raise them further. And yet — as counterintuitive as it may sound — that's exactly what is required.

As much hardship as the price spike in gasoline is already causing (average prices are already about 70 cents per gallon above last year's), the cost to consumers is only going to be greater if Maryland fails to invest in its roads and transit alternatives. That is the reality no matter what happens in Tripoli or elsewhere around the world.

The state tax on gasoline hasn't been raised in nearly two decades. Unlike sales, income or property taxes, it doesn't rise with inflation. So while 23.5 cents per gallon may have been adequate in 1992, it would have to be at least 13 cents higher today just to stay even with prices.

As the fuel tax is one of the primary sources for financing transportation improvements in this state, it isn't difficult to see the consequences of this inaction. Modest increases in vehicle fees and other transportation-related taxes over the past decade have helped, but Maryland's transportation infrastructure remains in questionable shape.

In the D.C. suburbs, traffic congestion is regarded as some of the worst in the country, and the Baltimore region isn't all that far behind. Reductions in the State Highway Administration's budget have limited that agency to primarily maintaining roads and bridges. Money is not available to finance light rail expansions on tap for Baltimore as well as Prince George's and Montgomery counties.

Admittedly, the problem has been worsened by the raiding of the Transportation Trust Fund by the current and former governors in difficult economic times. But even if all those monies were restored, there would still not be nearly enough to provide the billions required to meet the state's future transportation needs.

If conditions are allowed to deteriorate further, the costs to consumers could be enormous in longer commutes and higher repair bills. For many of us, being stuck in traffic 25 percent longer has the same effect as a 25 percent higher price at the pump (with the added cost of being trapped in one's car 25 percent longer).

Of course, members of the General Assembly could wait. They could make the political calculation that voters would regard a proposed 10-cent gas tax increase at a time when prices are rising rapidly as imprudent and ill-timed.

But that would imply that prices at the pump might fall substantially in the near future — or that there's no cost to further postponing construction projects. Neither assumption is valid. What lawmakers have is a chance to not only invest in a better, safer, more efficient transportation network but to create jobs right now.

Those aren't just engineering and construction jobs. Businesses make decisions about where to locate or expand based, in part, on the adequacy of roads and transit, the lifeblood of commerce. Connecting people with potential employers is one of the best investments government can make.

Might a 10-cent increase derail Maryland's economy? The notion is laughable. As Federal Reserve Chairman Ben Bernanke testified to Congress last week, gas prices may be an inconvenience, but they are not putting the recovery at risk. It would hardly be noticeable.

It's noteworthy, too, that Maryland's business community is virtually unanimous in its support for increased transportation spending. Gas tax advocates include the Maryland Chamber of Commerce, the Greater Washington Board of Trade and the Greater Baltimore Committee. These are taxes that improve Maryland's business climate.

What's stopping Annapolis? A lot of elected officials are just scared. They'd rather put the motoring public and the economy at risk than be criticized down the road for raising taxes. It's exactly the sort of short-sighted thinking that leaves problems to fester — and potholes to multiply.

If consumers are to pay dearly at the pump, wouldn't it be better for more of that money to stay in Maryland to improve life here rather than to give it all to oil companies and oil-rich nations? As the saying goes, you can pay now, or you can pay a lot more later.

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