Tuesday, January 31, 2012

MD Governor Proposes to Increase Taxes, Surprised Anyone?

from CBS Baltimore
ANNAPOLIS, Md. (WJZ)—Maryland’s gas prices could soon be going sky high. The governor has recommended applying sales tax to gas, and it could pump up prices more than 20 cents a gallon.

Meghan McCorkell has more on this controversial plan.

On Monday, the governor announced a proposal to apply the state’s 6 percent sales tax to gasoline.

The state already levies a 23.5-cent gas tax, and the sales tax proposal would be on top of that to generate new revenue for transportation infrastructure needs. The O’Malley administration said the proposal would raise the price of gas by about 6 cents a gallon in the first year, 12 cents in the second year and about 18 cents in the third year.

It’s an idea at least one lawmaker calls a nightmare.

Maryland’s gas prices could soon be the fourth highest in the continental United States. Governor Martin O’Malley wants to extend the state’s 6 percent sales tax to gasoline.

In a one-on-one interview with WJZ‘s Vic Carter, O’Malley says he knows this will be a struggle.

“Look, none of this is easy. And I know none of it’s going to be very popular. But there’s certain things that if we don’t do we end up paying in other ways,” O’Malley said.

The governor says the sale tax plan could raise $613 million that’s badly needed for a backlog of transportation projects.

The 6 percent on gas would be phased in over three years.

So for the $3.48 a gallon you pay now, by next year you’ll pay $3.54. That’s up two percent. In 2014, that will be $3.60. With the full 6 percent, it will be $3.66 a gallon by 2015.

The governor’s proposal would include a capping mechanism to limit the tax increase if gas prices spike again.

Political opponents say the governor’s plan hits too close to home.

“People have had enough. Working families are struggling. The governor is making living in Maryland a nightmare,” said Sen. E.J. Pipkin, Republican-District 36.

Drivers we spoke with agree, saying their budgets are already stretched too thin.

“When you add everything up, gas and everything else that has gone up, yeah it’s a contributing factor,” said Lee Madison, of Crofton. “No question.”

“Help us out, the poor guys out here working for a living,” one Maryland resident said.

The governor says this plan could put more people back to work on transportation projects across the state.

The governor plans to officially propose the hike sometime after his State of the State Address on Wednesday night.

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