The Price of Gas in Maryland

By Pat Fenati, Candidate for Maryland Delegate LD 14

Maryland began collecting fuel taxes in 1922 when the state created the Gasoline Tax Bureau to collect a tax on gasoline at the rate of 1 cent per gallon. Over the years that price rose many times until July 1 of 1993 when the Maryland tax on a gallon of gasoline was fixed at 23.50 cents.

It remained at that price until 2013 when a state law enacted that yearindexed the auto fuel tax to the annual change in the Consumer Price Index (CPI). On July 1st of 2013 the tax on gasoline jumped to 27.5 cents a gallon. That law requires the motor fuel tax rate to increase on July 1st of every year. If there is a decline or no growth in the CPI, the motor fuel tax rates shall remain unchanged. This means of course it cannot go down, even if the CPI were to fall by several points for several years. Then, when the CPI begins to rise again, gas tax will again rise beginning where it left off before the fall in CPI.

There has not been a big rise in CPI over the last ten years, but ten years ago the CPI was close to $0.06, and in history it has been much higher than that … But don’t worry this excise tax rate may not increase by more than eight percent (8%) of the tax rate imposed in the previous year. Phew!

In just four short years, the current motor fuel excise tax in Maryland has risen to 33.8 cents. With the current rise in CPI, our taxes on gasoline on July 1, 2018 will be 35.3 cents.

According to AAA, on June 6th the average price of a gallon of gasoline in Maryland is 2.89. In Montgomery County, the average price is 3.033. As stated in a recent article by CNBC, Maryland ranks among the states with the longest average car commute times. Maryland ranks 3rdfrom the top at 30.7 minutes per commute.

Let’s look at some costs. CarInsurance.com recently said the yearly average miles driven per driver is 14,834 miles and a recent Reuters article states the average miles per gallon per car is 24.7 MPG. That gives us an average of 488.19 gallons of gas per driver per year. Each driver will therefore spend $202.19 in gas tax per year. As of July1st that cost per driver will be $212.00 per year. And for those who commute, if you spend just 15 minutes a week idling … traffic lights, gridlock, etc. … the AAA says you use a quarter of gallon of gas for every 15 minutes of idling. That will add another 63 gallons of gas yearly or approximately another $22.00 for just standing there.

Did you ever wonder why gas is usually $0.10 a gallon less expensive in Virginia? The cost of gas tax in Virginia is 22.8 cents per gallon. That brings the cost per driver per year down to $109.35.

You know, when the price of gas is low, near or lower than $2.00/gal, we get complacent. We are relieved when the price is low and pay little attention to the state tax on gas. But as the price of gas edges towards or passes $3.00/gal we realize the extra we pay in state gas tax is pushing that price higher. And as the economy strengthens and the consumer price index increases over what it has been for the past decade we must pay more attention to that yearly gasoline tax increase.

Maryland needs representatives in Annapolis who understand the daily cost of living for their constituents and the cost of new programs. Those programs often have consequences and require more spending. We need representatives who will evaluate the costs of new programs before enacting them.

Mandated increases imposed by many state laws in Maryland will also cause the need for more mandated tax increases such as we now have in the gasoline tax. Our General Assembly needs to focus on fiscal responsibility.

Pat Fenati is currently the Chairman of Maryland LD 14.

 

 

Montgomery County Republican Party