Maryland Gas Tax Bill May Raise the Bar

One of the nation's most-watched and complex gas tax bills made significant progress in the House of Delegates. It retained one of its most significant parts, indexing the tax (and transit fares) to inflation, overcoming opposition by Republicans.

2 minute read

March 23, 2013, 11:00 AM PDT

By Irvin Dawid


Maryland Governor Martin O'Malley, after much discussion with Democrats and Republicans, unveiled his six-part gas tax proposal on March 4 that, if passed, would become effective July 1. Maryland's 23.5-cent gas tax was last increased in 1992. The initial plan (PDF) includes:

  • Reducing the state excise tax by 5-cents, 
  • Indexing both the gasoline excise tax and Maryland Transit Administration administered fares to inflation to inflation
  • Applying a portion of the state sales tax to the wholesale price of gasoline. This portion will be 2% in 2013 and 4% in 2014.
  • Ensuring that revenues generated remain dedicated for transportation purposes

On March 20 the House of Delegates "gave the bill its preliminary approval", writes The Sun's transportation beat reporter, Michael Dresser. In addition to thwarting Republican efforts to drop the indexing, earlier in the week significant changes were made according to WBAL News, including:

  • Elimination of the 5-cent gas tax reduction
  • Halving the new wholesale gasoline sales tax to 1% on July 1 and 2% on 2015

If approved on the House's final vote, expected March 22, the bill advances to the state Senate.

Dresser writes that in its current form, "[t]he plan would increase taxes on gas by 3.8 cents a gallon July 1 and [would] add increments in subsequent years. By 2016, motorists could be paying about 39.5 cents a gallon — 16 cents higher than now."

Some have compared Gov. O'Malley's original proposal to VA Gov. Bob McDonnell's plan, also composed of many parts, that would have eliminated the state gas tax entirely, replacing it with an increased general sales tax.

O'Malley's proposal retains the "user fee" approach while McDonnell's eliminated it, though in it's final forma new 3.5 percent wholesale tax on motor fuels was added to replace the gasoline excise tax which was eliminated; the general sales tax increase was reduced, and $200 million of general fund money was diverted to transportation programs.

One ironic exception to the elimination of the "user fee" principle for transportation funding in Virginia: The bill "double(d) the annual $50 registration fee on electric vehicles and also appl[ies] it to hybrid cars and those that use alternative fuels," wrote Fredrick Kunkle of the Washington Post.

In contrast to both Maryland and Virginia, the Wyoming gas tax increase is straightforward: 10-cents per gallon on July 1.

Editor's Note: Maryland's House of Delegates voted to approve the increase by a margin of 78-56 on Friday.

Wednesday, March 20, 2013 in The Baltimore Sun

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 16, 2025 - Diana Ionescu

Green vintage Chicago streetcar from the 1940s parked at the Illinois Railroad Museum in 1988.

Chicago’s Ghost Rails

Just beneath the surface of the modern city lie the remnants of its expansive early 20th-century streetcar system.

July 13, 2025 - WTTV

Blue and silver Amtrak train with vibrant green and yellow foliage in background.

Amtrak Cutting Jobs, Funding to High-Speed Rail

The agency plans to cut 10 percent of its workforce and has confirmed it will not fund new high-speed rail projects.

July 14, 2025 - Smart Cities Dive

Worker in yellow safety vest and hard hat looks up at servers in data center.

Ohio Forces Data Centers to Prepay for Power

Utilities are calling on states to hold data center operators responsible for new energy demands to prevent leaving consumers on the hook for their bills.

July 18 - Inside Climate News

Former MARTA CEO Collie Greenwood standing in front of MARTA HQ with blurred MARTA sign visible in background.

MARTA CEO Steps Down Amid Citizenship Concerns

MARTA’s board announced Thursday that its chief, who is from Canada, is resigning due to questions about his immigration status.

July 18 - WABE

Rendering of proposed protected bikeway in Santa Clara, California.

Silicon Valley ‘Bike Superhighway’ Awarded $14M State Grant

A Caltrans grant brings the 10-mile Central Bikeway project connecting Santa Clara and East San Jose closer to fruition.

July 17 - San José Spotlight