Want gas to be 18 cents cheaper?
That?s what would happen between Memorial Day and Labor Day under a proposal advanced by two presidential candidates to temporarily eliminate the federal tax charged on every gallon of gas and diesel.
An elimination of Maryland?s own 23-cent gas tax is unlikely with legislators not in session, state officials said. Three weeks ago, state Sen. Andy Harris called for a special session to pass such a measure, but said Gov. Martin O?Malley and other state leaders did not advance the proposal.
“There?s very few things we can do at the state level to help, and this is one of them,” Harris said. “The state leaders don?t like tax cuts and they don?t like this one, but the people are clamoring for [lawmakers] to do something about gas prices.”
Gas prices in the Baltimore area reached $3.59 per gallon by Friday afternoon, up from $3.23 a month ago and $2.94 a year ago, according to the AAA.
In an April 15 speech, presumptive Republican presidential candidate John McCain proposed a summer-long break in the federal tax on fuel, 18.4 cents per gallon of gasoline and 24.4 cents for diesel. Democratic candidate Hillary Clinton has also backedthe tax holiday, and proposed a windfall profits tax on major oil companies to make up the difference. Candidate Barack Obama has opposed the break in favor of long-term solutions.
Dropping the gas tax would cost the U.S. as much as $10 billion in federal funding, according to some estimates.
Maryland netted $755.7 million from its gas tax last year, placed into a trust fund for the maintenance and expansion of state roads and mass transit projects. A total of $13 million went into the general fund, but lawmakers during a special session last fall opted to end contributions into the general fund from the tax, according to David Roose, director of the Bureau of Revenue Estimates.
The slight decrease in price might be lost if it increases demand for gas during the peak summer travel months, said Byron King, a fuel and oil expert with Baltimore-based Agora Financial.
“It?s the worst of both worlds,” he said. “Of all the taxes you could cut, the idea of cutting a tax that?s going to encourage the consumption of energy, that?s long-term bad. If you?re going to cut a tax, cut a tax that?ll encourage people to insulate their houses and cut on heating oil or buy better lightbulbs.”
The Associated Press contributed to this story.
