Maryland Gov. Larry Hogan and top legislative leaders agreed Thursday to a 30-day suspension of the state's gas tax amid rising prices at the pump.
The agreement was announced after state officials said Maryland's revenue projections have jumped an additional $1.6 billion for the current and next fiscal years as a result of the huge federal aid to address the coronavirus pandemic.
“Increased revenue projections for this year and next year give us the flexibility to provide immediate relief to families,” House Speaker Adrienne Jones and Senate President Bill Ferguson said in a joint statement. “This swift action will help ease the financial burden on everyday Marylanders while keeping the pressure on Vladimir Putin and the Russian oligarchs who have enabled him.”
The suspension of the gas tax, which is nearly 37 cents a gallon, requires legislation.
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“We expect it to get done next week,” Michael Ricci, Hogan’s spokesman, wrote in an email. “We are in agreement on the timeframe."
The increase in revenue is in addition to several billion dollars in budget surplus that state lawmakers have been considering how to manage as they shape the state’s budget for the next fiscal year, which begins July 1.
The new revenue estimates, which includes $867 million for the current fiscal year and $737 million for the next one, are largely due to growth in individual and corporate tax collections.
Both Comptroller Peter Franchot, a Democrat, and Hogan, a Republican, called to suspend the gas tax after the revenue increase was announced at a Board of Revenue Estimates meeting.
Hogan released a statement after the meeting in support of the gas tax suspension — and to push for other tax relief he supports.
“This report further proves that we have a once-in-a-generation opportunity to advance substantial tax relief for our families, small businesses, and retirees,” Hogan said. “People across the country are being squeezed by surging inflation on everything from gas to groceries — Marylanders, especially our retirees, deserve and need this relief.”
Franchot, the state's tax collector whose office also regulates motor fuel, called for a three-month gas tax holiday, as well as for second round of economic stimulus to help low-wage earners, small businesses and child-care providers who continue to struggle from the pandemic.
While the comptroller congratulated the speed of the agreement between the governor and presiding officers, he said more should be done.
“The unfortunate reality is the economic whiplash at the gas pump resulting from the Russian invasion of Ukraine will be felt by Marylanders for more than 30 days,” Franchot said, continuing to call for a three-month gas tax break.
Franchot continued to call for $2,000 emergency checks for low-wage earners, as well as $500 million for child-care providers and $500 million to help small businesses.
The General Assembly, which is controlled by Democrats, is considering an array of tax-relief measures. For example, the House of Delegates already has passed a package of legislation to help working and middle class families, including cutting the state’s sales tax on goods like diapers, car seats and diabetic care products.
The governor also expressed support for legislation that would end automatic annual increases in the state's gas tax, based on inflation as measured by the consumer price index.
“We should not walk out of here and leave an automatic gas tax increase, not with what people are paying right now at the pump. It was a terrible idea in the first place and now with inflation and gas at record levels we need to stop it,” Sen. Michael Hough, a Frederick County Republican who is sponsoring the bill, told reporters Wednesday.
When combined with a $2.5 billion general fund balance from fiscal year 2021, Maryland has about $7.5 billion in excess revenue over a two-year span, the comptroller's office said.
