As Revenue Estimates Soar, State Leaders Are Considering Temporarily Suspending the Gas Tax | Maryland


Maryland’s top political leaders stated Thursday afternoon that they will work together to suspend the state’s gas tax for 30 days, citing fresh revenue predictions that show the state’s cash reserves expanding to record levels while gasoline prices continue to skyrocket.

Efforts to shelter motorists from the state’s 37-cent-per-gallon fuel tax escalated Thursday, when the Board of Revenue Estimates projected that Maryland’s budget surplus will expand by another $1.6 billion over the next two years, totalling roughly $7.5 billion.

Gov. Lawrence J. Hogan Jr. (R) characterised the surplus as a “once-in-a-generation chance to deliver significant tax relief for our families, small companies, and seniors” in a statement.


Gas Tax


Aides to Hogan and legislative leaders immediately convened a meeting to consider a measure suspending the collection of the state gas tax for 30 days. While service stations would continue to collect the levy, they would be obligated to lower their prices proportionately.

“[W]e are negotiating an emergency suspension of the gas tax with our legislative colleagues to alleviate the agony at the pump,” Hogan added. “We also support ongoing legislative attempts to stop automatic gas tax hikes,” Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County) said in a joint statement announcing their support for the idea shortly afterwards.

“Marylanders are in desperate need of aid right now, and we are banding together to provide it by suspending the state’s gas tax for 30 days,” the lawmakers wrote. “Over the last month, Marylanders have witnessed an exponential surge in gas prices, compounding already growing costs.

Increased revenue expectations for this and the following years allow us to provide immediate aid to families.”

A bill to repeal the gas tax might be introduced as early as Friday, according to an official, with approval possible by the middle of next week.

Officials admitted that ensuring customers notice a quick decrease in fuel costs will be critical to the tax holiday’s success.

The announcements came shortly after the Board of Revenue Estimates approved an increase of $1.6 billion in revenue predictions for the current and subsequent fiscal years.

Comptroller Peter V.R. Franchot (D) urged the governor and General Assembly to enact a three-month state gas tax vacation and reaffirmed his call for a $2,000 stimulus package for low-income Marylanders during the board’s meeting. Franchot, a candidate for governor in Maryland, has also proposed a $500 million relief fund for small businesses in the state.

“There is still a sizable segment of Marylanders who are not experiencing or benefiting from the economic prosperity enjoyed by the vast majority of Marylanders,” Franchot said. “The economic fault lines that existed before COVID-19 forced our economy to shut down remain wide, and for so many of our friends and neighbours who work in low-wage employment, they continue to suffer from the pandemic’s devastation with little hope of recovery.”

Following Hogan, Ferguson, and Jones’ announcements, the comptroller complimented them for responding with “lightning speed,” but continued to advocate for additional action.

“The regrettable reality is that Marylanders will experience economic whiplash at the gas pump for more than 30 days as a result of Russia’s invasion of Ukraine,” Franchot said in a statement.

The Board of Revenue Estimates, which also includes Treasurer Dereck E. Davis (D) and Budget Secretary David R. Brinkley, upped the state’s fiscal year 2019 tax revenue prediction to $22.5 billion, an increase of $867 million over December estimates. Official income forecasts for Fiscal Year 2023, which begins on July 1, have been increased by $737 million to $23.6 billion.

The revised estimates are anticipated to have an effect on the General Assembly’s budget talks; the Senate Budget and Taxation Committee is scheduled to vote Friday afternoon on a budget proposal.



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Republicans in the legislature have been pressuring Democrats who control both chambers to enact significant tax cuts, and those calls intensified following Thursday’s meeting of the Board of Revenue Estimates. They portrayed as tragically inadequate a series of tax relief measures passed by the House of Delegates last week on commodities such as diapers and oral health products.

“Democrats in Maryland have tossed a few pennies to taxpayers and want them to be appreciative,” House Minority Whip Haven N. Shoemaker Jr. remarked (R-Carroll). “This Marie Antionette approach of ‘let them eat cake’ is an insult to all struggling families.” With a $7.5 BILLION surplus, no member of the General Assembly can honestly claim that we cannot afford broad-based tax relief for Maryland residents.”

On Wednesday evening, Del. Kathy Szeliga (R-Baltimore County) urged Hogan to deliver $1,000 in tax relief to every Maryland resident, noting that doing so would consume less than half of the state’s expected surplus.

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