Maryland Gov. proposes fuel tax changes to fund transportation projects

Updated Mar 13, 2013
Maryland Gov. Martin O’MalleyMaryland Gov. Martin O’Malley

Maryland is the latest state looking to use the fuel tax as a way to fund transportation infrastructure projects.

Recently, Gov. Martin O’Malley recently unveiled a five-year plan to generate $3.4 billion for state highway and transit projects. The bill will go before a House hearing March 15, according to a report from our sister publication Overdrive.

O’Malley’s Transportation Infrastructure Investment Act, HB 1515, would initiate a 2-percent motor fuels tax rate on the retail prices of those fuels. The tax would begin July 4 and increase to 4 percent by 2014 and to 6 percent in 2015. Wholesale gas prices would also be included in the tax.

There is a chance that the tax could remain at 4 percent. The final increase would not take effect if a federal law is passed that would allow states to require out-of-state fuel sellers to collect sales and use taxes on in-state customers.

The bill would also reduce state tax on gas from 23.5 to 18.5 cents per gallon and index it to the Consumer Price Index.

Recently the Wyoming Senate approved a measure to increase the state’s motor fuels tax by 10 cents per gallon in order to fund highway improvements. That legislation is expected to generate approximately $72 million annually in revenue for road maintenance and improvements in 2014.

And in Pennsylvania, Gov. Tom Corbett has proposed a wholesale fuel tax designed to generate more than $5 billion over five years to improve roads, bridges and mass transit services.