Maryland fuel tax, vehicle fee increases pursued

| Thursday, March 03, 2011

Plans to boost transportation funding are drawing discussion at the Maryland statehouse. Additional revenue is sought through a dime increase in fuel taxes and higher vehicle registration fees.

Truckers in the state say the tax and fee increases would have dire consequences on the industry.

Senate Majority Leader Rob Garagiola, D-Montgomery, and Delegate Bill Frick, D-Montgomery, have introduced bills that would hike the diesel tax to 34.25 cents per gallon ? up from 24.25 cents. The gas tax would climb to 33.5 cents per gallon ? up from 23.5 cents.

Beginning in 2013, the fuel tax would be tied to the annual percentage growth in construction costs. The distinction could add up to a one-cent increase each year.

Vehicle registration fees would also be increased by 50 percent.

If approved, the state?s nearly bankrupt Transportation Trust Fund would receive an additional $470 million next year. A blue-ribbon commission on transportation funding recently determined that the state needs $800 million in additional revenue each year to keep up with current needs.

Because the trust fund has historically been raided to help balance the state budget, a question would be put on the 2012 ballot whether to prohibit lawmakers from raiding the fund to balance the budget. Passage of a constitutional amendment would prevent money from being used for any other purposes.

In the case of an emergency, it would take a three-fifths vote of the General Assembly to use transportation funds for other purposes.

A separate effort from Delegate Susan Krebs, R-Carroll, calls for the constitutional amendment as well, but without the tax and fee increases.

?Raising taxes is not the answer to our budget problems, Krebs said in a statement. ?Instead, we must protect the Transportation Trust Fund from raids and diversions ? so our stalled state highway construction plans can get moving again.?

Supporters say the protection from ?raids? is a must. In fact, Gov. Martin O?Malley?s budget proposal for fiscal year 2012 calls for diverting $100 million from the trust fund.

Critics say increasing the diesel tax by a dime would cause truck drivers to avoid fueling up in Maryland. Higher vehicle titling fees could also lead to trucking operations in the state to pack up and move across state lines.

The Maryland Motor Truck Association opposes the legislation. Louis Campion, the group?s president and CEO, said the tax and fee increases would add another $3,000 in out-of-pocket expenses for most truck drivers.

?We pay $1,800 a year for one truck. A 50 percent increase and we?re going to pay $2,700 to put license plates on one vehicle,? Campion told Land Line Now. ?That is $1,000 higher than the number two state in our region.?

He said a dime increase in the diesel tax would cost truckers another $2,000 each year.

The House Ways and Means Committee met earlier this week to discuss Frick?s bill ? HB1001. The Senate Budget and Taxation Committee is scheduled to address Garagiola?s bill ?SB714 ? on Wednesday, March 9.

The Owner-Operator Independent Drivers Association encourages Maryland truckers to contact their state lawmakers to share their views on the legislation.

To view other legislative activities of interest for Maryland, click here.

Editor?s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to statelegislativedesk@ooida.com.

Land Line Now Staff Reporter Reed Black contributed to this report.