The proposal by Gov. Martin O'Malleyto apply Maryland's state sales tax to gasoline should be welcomed in Annapolis and throughout the state as a step toward fiscal responsibility ("O'Malley seeks sales tax on gas," Jan. 31). Regardless of whether it is sound policy, the mantra that public expenditures should pay for themselves rings loudly inside legislatures throughout the country, and few expenditures are more heavily subsidized than those comprising our automotive infrastructure.
Maryland presently levies a 23.5 cents per gallon gas tax, the 30th highest in the nation. This tax is on top of the federal gas tax of 18.4 cents per gallon, totaling 42 cents per gallon. At six cents per dollar, adding the Maryland sales tax to gasoline would add approximately 18 to 24 cents per gallon at current prices. It sounds like a huge sum, but in reality, it is not nearly enough.
Since its implementation in 1922, Maryland's gas tax has risen steadily with inflation from 2 cents per gallon to its current rate, which was set in 1992. Since 1992, however, the rate has remained the same, completely unadjusted for inflation. The federal gas tax rate, likewise, has been set at its current rate since 1993. Nevertheless, even if we were to adjust these rates to keep up with inflation, the revenues collected would still be insufficient to pay for our automotive infrastructure.
By some estimates, gas tax revenues account for only 8 percent of all automotive transportation costs. Additional fees, such as registrations, bring in additional revenues, but general revenues from non-dedicated sources pay for our automotive infrastructure. At current spending levels, we would need a gasoline tax of $5.75 per gallon to cover sufficiently all costs without dipping into general revenues. That price would rise even higher if we were to consider the "soft" or "external" costs of the automobile, such as pollution cleanup and medical treatment.
Granted, a $6 gasoline tax is not politically viable and, even if it were, it is probably impractical. Levying sales tax on gasoline, on the other hand, is an achievable goal that helps us align how we pay for services with how we spend taxpayer money. It will allow us to better track public money and evaluate spending priorities. In the battle for balanced budgets and fiscal responsibility, we should view applying the sales tax to gasoline as a victory.
Peter T. Smith, Baltimore