Maryland gas tax becomes governor’s race issue as Hogan and Franchot train

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Gubernatorial candidates have expressed divisive views on Maryland’s impending gas tax hike like a cudgel this week, seeking to score points with voters ahead of a July primary while those able to bring relief stood apart.

The expected 18% increase automatically happen in July, divided the crowded Democratic field as Republican candidates capitalized on economic discontent. It’s a strategy that political pundits say eased Republican Gov. Larry Hogan’s path to victory in two elections in a deeply Democratic state.

“This is already shaping up to be a bad year for Democrats. This is a tailor-made issue for Republicans running in Maryland,” said Todd Eberly, a political scientist at St. Mary’s College.

Hogan’s lack of action has candidates scrambling to define what leaders should or could have done differently. The term-limited governor suggested that a Democratic state official, who has been his ally in the past but is now one of the candidates to succeed him, should use his power to help motorists – even if the State attorneys say this is not legally allowed.

Ahead of the July 19 primary, some gubernatorial candidates called for the increase to be halted for six months or a year. Others have launched another gas tax holiday that would completely suspend the state gas tax, which is set to drop from 36.1 cents per gallon to 42.7 cents.

Despite all the positioning of the candidates, however, Maryland’s political leaders intend to let the increases take effect, saying the state’s transportation infrastructure cannot afford to lose the $200 million that the increase will generate next year.

The tax increase, which is automatically adjusted according to the consumer price index for each July, often goes unnoticed. But with inflation at its highest level in 40 years, this year’s increase translates to a jump of 6.6 cents at a time when prices have already been hitting record highs for months.

For the average 12-gallon tank in a sedan, the increase amounts to an additional 79 cents per fill.

“There’s a huge difference between the real dollar cost and the political cost,” Eberly said. “And the political cost of appearing indifferent is quite substantial.”

Hogan announced the new rate on Monday and challenged his former political ally, Comptroller Peter Franchot, one of the leading Democratic candidates to succeed him, to find a way to avoid it. Franchot, the state tax collector, does not have the authority to do so, the Maryland attorney general said this week.

“This tax increase, while creating hardship for the people of Maryland at all times, is simply unconscionable,” Hogan wrote, telling Franchot, “I hope you will use all legal and regulatory powers to your disposition to stop or minimize the impact of accelerating gasoline taxes.

He asked the Comptroller to stop collecting the tax and waive penalties for people who refuse to pay. The comptroller’s office said it had no power to do so – and it would do little to bring prices down as those taxes would eventually come due.

“Put simply, if I was legally able to prevent the fuel tax increase from taking effect, I would have done so already,” Franchot wrote in a letter Tuesday asking legislative leaders states to vote to prevent the increase instead.

He asked Hogan and the presidents to call a special session to vote next week, June 1. The House Republican Caucus, which unsuccessfully pushed a bill this spring to avoid the increase, sent a letter making the same request.

Hogan did not respond, and the Speakers of the Legislature refused.

“We cannot have a reliable transportation system that routinely experiences failing conditions due to insufficient funding and deferred maintenance,” said House Speaker Adrienne A. Jones (D-Baltimore County) and Senate Speaker Bill Ferguson (D-Baltimore City) in a joint statement. .

“The problem is not the marginal impact of the $0.06 inflation adjustment on the wholesale gas tax. The problem is that the big oil companies are exploiting global uncertainty to push the price of gas above $4 a gallon.

The episode, however, created another opportunity for Hogan’s hand-picked candidate to succeed him, former Commerce Secretary Kelly Schulz, to draw attention to her ads and a social media blitz on Democratic inaction on gas prices.

She took a page from the governor’s playbook, whose 2014 upset victory in deep blue Maryland was built on cleverly worded attacks on taxes such as the “rain tax.”

Schulz called the increase a “tax on inflation.”

“I won’t be afraid to fight for hardworking Marylanders,” she wrote on Facebook this week, saying, “Controller Franchot shirks responsibility.” She added in a video that she would repeal it if elected, “just like the governor repealed the rain tax in the first year of his term.”

Schulz’s main Republican opponent, Del. Dan Cox, said on Facebook on Wednesday that if elected, he would use executive power to immediately suspend the gas tax, although it was not immediately clear whether the governor has the power to do so.

Economists say repealing the tax would have bigger consequences, although voters – who can expect to feel higher prices for the rest of the year – see it differently.

High inflation will persist next year, according to Congressional Budget Office projects

Anirban Basu, economist and CEO of the Sage Policy Group, said gasoline prices have an outsized psychological impact on how people perceive inflation, but in reality state officials cannot not do much to change them significantly.

A winning policy strategy might be to forego the increase and suspend the gas tax altogether, he said, but “if I tried to give advice based on what I think is good policy I would say let the gas tax increase sweat. We need revenue for infrastructure, and it’s good if people start driving less.

The governor’s competitive and crowded Democratic field is divided on whether to adjust gasoline taxes.

John B. King Jr., former education secretary under President Barack Obama, for example, said focusing on a reprieve is short-sighted when leaders should quickly reduce their dependence on fossil fuels. Lifting the tax would not save individual drivers much money, but would take money away from public works projects, he said.

But three other Democrats have backed at least halting the increase, arguing that voters need immediate relief. Wes Moore, author and former nonprofit leader; Jon Baron, former federal appointee and head of a nonprofit organization; and Tom Perez, a former labor secretary under Obama, each backed a postponement of the tax hike. Perez added that he supported targeted hike relief that would also help transit users.

Other Democratic candidates, including Ashwani Jain and two others, went further, pushing for a total suspension of the tax.

Rushern Baker, the former Prince George County executive, and Doug Gansler, the former state attorney general, each used the joust between Hogan and Franchot to suggest they would act where others would not. not.

“People capable of providing relief are just pointing fingers while people pay an arm and a leg just to get to work in the morning,” Baker said. “Voters need to know they’re voting for someone who has the will to step up when the going gets tough.”

Gansler supported the idea of ​​using executive power to suspend the gas tax: “Marylanders need relief at the pumps and they’re tired of this bickering and dithering.”

Some motorists say they would appreciate the relief.

“It’s terrible,” William Obioha, 19, said as he leaned on his Subaru Legacy at a Sunoco gas station in Silver Spring this week, where gas was $4.90 a gallon. Obioha said he quit working as a driver for DoorDash a month ago because high gas prices were cutting into his profits and making him unsustainable.

Obioha said he doesn’t pay much attention to politics, but “all I want is for the gas to go down.”

Rebecca Tan contributed to this report.

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