This story was updated on March 21, 2013.
The House of Delegates gave preliminary approval to a bill to raise the gas tax Wednesday night, after limiting the annual increases on the excise tax to 8 percent of the previous year’s tax.
Currently, that 8 percent amounts to a 1.8-cent increase each year, according to Del. John L. Bohanan Jr. (D-Dist. 29B) of California, who proposed the amendment.
Other amendments adopted by the House include a study on how to get assistance to low-income Marylanders who need help paying for transportation.
As proposed, O’Malley’s bill would raise $3.4 billion over five years, by indexing the current 23.5-cent excise tax to inflation, and adding a 4 percent tax to wholesale sales. That wholesale tax could go up to 6 percent if Congress does not pass the Marketplace Equity Act, which would let states collect sales tax from online purchases. If that law passes, a portion of that revenue would go toward transportation funding.
The House committee made several changes to the bill, including phasing the tax increases differently. As a result, should the bill pass as amended, the gas tax would go up by 3.8 cents per gallon in July 2013, and an additional 4.2 cents in 2015. All told, if the federal government does not pass the online sales tax law, the gas tax may be 44.6 cents in 2018, although that number depends on the price of gasoline.
Republicans sent a barrage of amendments at the bill, including further limits to the annual increase and striking the provision for indexing the excise tax altogether. The indexing provision means the tax will continue to rise each year alongside inflation.
The bill also has a “lockbox” provision to keep gas tax revenue in the Transportation Trust Fund, unless the governor declares a fiscal emergency and gets approval of three-fifths of members of the House and Senate committees. Republicans have said the requirements to move transportation funds to other purposes are not strong enough.
“This isn’t a lockbox,” said Del. Herbert H. McMillan (R-Dist. 30) of Annapolis. “It’s a wet paper bag. A hamster could bust out of this thing.”
No changes were made to the lockbox provision Wednesday.
A final House vote on the bill could come as soon as Friday.