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.

June 25, 2025 - Diana Ionescu

Map of Western U.S. indicating public lands that would be for sale under a Senate plan in yellow and green.

Map: Where Senate Republicans Want to Sell Your Public Lands

For public land advocates, the Senate Republicans’ proposal to sell millions of acres of public land in the West is “the biggest fight of their careers.”

June 19, 2025 - Outdoor Life

Person wearing mask walking through temporary outdoor dining setup lined with bistro lights at dusk in New York City.

Restaurant Patios Were a Pandemic Win — Why Were They so Hard to Keep?

Social distancing requirements and changes in travel patterns prompted cities to pilot new uses for street and sidewalk space. Then it got complicated.

June 19, 2025 - Diana Ionescu

Close-up of full beer glass with purple train-themed design sitting on bar between two frosty tall cans.

Platform Pilsner: Vancouver Transit Agency Releases... a Beer?

TransLink will receive a portion of every sale of the four-pack.

June 30 - Cities Today

Vintage red Toronto streetcar passing in front of Rogers Arena in Toronto, Canada.

Toronto Weighs Cheaper Transit, Parking Hikes for Major Events

Special event rates would take effect during large festivals, sports games and concerts to ‘discourage driving, manage congestion and free up space for transit.”

June 30 - blogTO

Map of Berlin with ring roads in green and red.

Berlin to Consider Car-Free Zone Larger Than Manhattan

The area bound by the 22-mile Ringbahn would still allow 12 uses of a private automobile per year per person, and several other exemptions.

June 30 - Streetsblog USA

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.