Governor Hogan Calls on Comptroller Franchot to Minimize Impact of Scheduled Summer Gas Tax Increase

ANNAPOLIS, MD—Ahead of the summer travel season, Governor Larry Hogan today called on Comptroller Peter Franchot to immediately take steps to halt or minimize the impact of the legislative gas tax increase that his office is scheduled to announce in the coming days.

Under legislation passed by the General Assembly in 2013, the Comptroller announces gas tax increases on or before June 1 of each year that are set to take effect on July 1. The tax increase is calculated by the Comptroller’s Office.

“This tax increase, while hardship-inducing for Marylanders at any time, is simply unconscionable at this moment when gas prices are already at their highest level in recorded history amid a period of prolonged inflation and economic uncertainty,” writes Governor Hogan in a letter to the comptroller. “I know that you agree we should do more to give Marylanders a break from these punishing prices. That is why it is my hope that you will use every legal and regulatory power at your disposal to halt or minimize the impact of the accelerating gas taxes, and that you consider granting an extension for paying the taxes and removing penalties for unpaid tax, including the revocation of business licenses.”

Past Comptroller Actions. In the letter, the governor notes that the comptroller has been a strong advocate for protecting Marylanders from rising gas prices, and points out that in the past, the comptroller has taken actions to protect Marylanders from impending tax deadlines and burdens. In January of this year, for example, Comptroller Franchot extended the individual income tax filing and payment due date for the third consecutive year, as well as the individual estimated tax payment due dates, to give “breathing room” to Marylanders who were struggling financially.

“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,” the governor writes. “I am calling on you to take immediate action to provide much-needed relief, particularly as citizens of our state begin to plan their summer travels.”

Also of note, in 2015, the General Assembly rejected the governor’s legislation to permanently suspend increases in the gas tax indexed to inflation. During the 2022 session, the General Assembly failed to act on measures to repeal a portion of the tax (SB0337/HB0144) and to suspend the increases through 2024 (HB1191/SB0737).

Read the letter to Comptroller Franchot, the full text of which is below:

Dear Comptroller Franchot,

It is my understanding that you will soon announce large increases to Maryland’s motor fuel tax. This tax increase, while hardship-inducing for Marylanders at any time, is simply unconscionable at this moment when gas prices are already at their highest level in recorded history amid a period of prolonged inflation and economic uncertainty.

I know that you agree we should do more to give Marylanders a break from these punishing prices. That is why it is my hope that you will use every legal and regulatory power at your disposal to halt or minimize the impact of the accelerating gas taxes, and that you consider granting an extension for paying the taxes and removing penalties for unpaid tax, including the revocation of business licenses. This would be in line with similar actions you have recently taken when you perceive various state laws to be too burdensome on Marylanders; for example, in January of this year, you extended the individual income tax filing and payment due date for the third consecutive year, as well as the individual estimated tax payment due dates, to give “breathing room” to Marylanders who were struggling financially.

In 2015, I proposed legislation to permanently suspend increases to the gas tax, which was unfortunately and shortsightedly rejected by the General Assembly. It was even more unfortunate when the General Assembly failed to pass legislation to prevent further increases to the gas tax during the 2022 session—well into the current inflation crisis—despite proposed bills to repeal a portion of the tax (SB0337 and HB0144) and to suspend the increases through 2024 (HB1191 and SB0737).

These failures make it incumbent on your office to step up and take action to help struggling Marylanders. After consulting with state budget and transportation officials, I am confident that the state can absorb the financial impact of foregoing this ill-conceived and ill-timed tax increase. 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. I am calling on you to take immediate action to provide much-needed relief, particularly as citizens of our state begin to plan their summer travels.

Sincerely,

Larry Hogan
Governor