Gov. Lawrence J. Hogan Jr. (R) called on state Comptroller Peter V.R. Franchot (D) to ease the annual gas tax increases mandated by legislation that will take effect this summer. And Franchot, a Democratic gubernatorial candidate, quickly responded by calling on the governor to declare a state of emergency to temporarily suspend the tax altogether.
Since 2013, the state’s gas tax rate increases each year if the comptroller’s office determines that the consumer price index — which measures the cost of changes in a basket of goods and services that is widely used to measure inflation — has increased over the past year. If there is no increase in the consumer price index, then gas tax rates stay the same.
The state gas tax is expected to increase on July 1 from 36.1 cents per gallon to 43 cents per gallon, according to the formula.
In a letter sent on Monday, Hogan asked Franchot to “use every legal and regulatory power at your disposal to halt or minimize the impact of the accelerating gas taxes” and also consider extending tax payments and removing penalties for unpaid tax.
“Given shaky oil markets, record inflation, and a skyrocketing cost of living, the continued surges in gas prices are inflicting more pain at the pump than Marylanders can bear,” Hogan, who will leave office in January because of term limits, wrote.
In a response letter, Franchot said he agreed that increasing the tax while costs are rising is “morally and economically irresponsible.” Franchot said his office has been exploring legal pathways it can take to prevent the mandated gas tax increase from taking effect.
The comptroller also called on Hogan to also take action by declaring a “state of energy emergency” to suspend the state gas tax until September.
“As my office continues to look for regulatory and statutory flexibility on this matter, I am urging you to immediately proclaim a State of Energy Emergency as set forth by state law,” Franchot wrote. “Doing so would not only provide relief from the current motor fuel tax rate, but it will also temporarily prevent an increase to the gas tax from taking effect.”
Franchot had opposed the law creating automatic increases in gas tax rates when the plan was introduced and told CBS Baltimore that “it would just be a brutal assault on people that can’t afford to pay for this” in 2012.
The governor’s office was encouraged by Franchot’s response.
“It is encouraging that the Comptroller is considering taking action as he has in similar situations in the past, and we hope he will announce his plan to Marylanders as soon as possible,” Michael Ricci, spokesman for Hogan, said in a statement.
The exchange comes after gas prices across Maryland and the country sharply increased earlier this year, as oil production has been slow to catch up to a rapid rise in gasoline demand following a pandemic-induced recession. Then as Russia’s attack on Ukraine unfolded, oil prices further rose globally.
The governor and General Assembly responded by enacting a gas tax holiday in March that paused collection of the state’s tax on fuel for 30 days, which effectively drove the average price for a gallon of regular in Maryland down by 39 cents a few days after the tax holiday took effect.
But as the gas tax holiday neared the end, Republican lawmakers tried and failed to extend the state’s gasoline tax holiday for 45 more days through a bill amendment. Franchot had also called for a three-month extension at the time.
Republican lawmakers also introduced an emergency bill this legislative session that would have temporarily suspended the annual increase on the state’s gas tax on fuel based on inflation for two years, but those bills did not move out of committee.