- The Enterprise
- The Recorder
A problem with proposing a tax increase on a product is that it’s not always possible to predict the future pretax price of said product. That’s the trouble at the moment with Gov. Martin O’Malley’s call to apply the 6 percent sales tax to the cost of gasoline, to be phased in over three years. Talk about bad timing.
As anyone with a vehicle, eyes and a pocketbook knows, the price of gasoline is soaring. Worse, gas prices are expected to continue to rise, quite possibly cracking the $4-per-gallon mark soon. Oil prices — subject to geopolitics such as the tensions between the West and Iran — surpassed $106 a barrel last week in Asia.
In fact, some economists are worried that fuel prices will upset the continuing economic recovery from the Great Recession, similar to two years ago.
As drivers cope with their pain at the pump, lawmakers in Annapolis understandably have become queasy, if not downright hostile, to the idea of raising the price of gasoline in Maryland at this time. They know that many of their constituents are hurting. Heck, they, too, are being squeezed when they fill up their vehicles.
Complicating matters, practically everyone agrees that the state’s Transportation Trust Fund needs to be replenished. As has been much documented, the transportation money repeatedly — and unwisely — has been redirected to the general fund.
The business community points out the economic necessity of repairing and upgrading the state’s transportation infrastructure. The governor talks about how transportation spending could create jobs.
Groups such as AAA Mid-Atlantic say they could support a “moderate” tax increase to restock the transportation fund. The trouble is, what constitutes moderate in a volatile fuel market? AAA Mid-Atlantic, which recognizes the “hardship on motorists” of rising gas prices, is still evaluating the governor’s proposal in that regard, said the organization’s Ragina Averella.
Earlier this month, 22 state senators proposed a constitutional amendment that would essentially put the Transportation Trust Fund in a lockbox. Money couldn’t be transferred out of the fund without the governor declaring a public safety or health emergency. A three-fifths vote of the legislature would be needed, and the money would have to be repaid within five years. That’s commendable, and a necessary safeguard to protect against raids on the fund.
Of more immediate concern is safeguarding the state’s financially strapped residents, many of whom voiced displeasure about a gas tax increase in a recent Washington Post poll.
It’s conceivable that lawmakers eventually might approve a scaled-back transportation program that would fix fewer bridges and create fewer jobs but would cost less. Still, it comes down to what the state’s residents can comfortably bear — and given what is happening with gas prices, that picture is getting murkier with each passing day.