ANNAPOLIS — House and Senate Republicans said Thursday they will press for a 30-day gas tax holiday to ease skyrocketing gas prices spawned by the Iran war.
Since the conflict began last month with U.S. and Israeli attacks on Iran, the price of a gallon of regular gas in Maryland has risen by 93 cents, to an average of $3.83 a gallon as of Friday, according to AAA. The state share is 46 cents a gallon.
“We’ve been talking about taxes, but one of the things that’s happened, obviously, with the conflict in the Middle East, is that gas prices have been rising, and it’s somewhat to be expected,” said Senate Minority Whip Justin Ready (R-Frederick and Carroll). “You have a conflict, or a war happening in the Middle East of any kind, you’re going to see a disruption in gas prices. Hopefully it’s temporary.”
In the meantime, House Republicans will focus on getting gas-holiday language inserted into a budget reconciliation bill scheduled to come up next week, said House Minority Leader Jason C. Buckel (R-Allegany). The budget bills passed the Senate this week and are headed to the House, which is expected to largely agree to the bills.
“I think it’s already a little bit baked in the cake, but it won’t be up for our consideration until roughly next Wednesday,” Buckel said of the budget package. “I believe that’s the anticipation of when it will be on the floor. But we’re going to make the argument in that fashion, because it makes more sense to do it and force people to take a position on the issue (a gas-tax holiday). I don’t think anyone should really be opposed to this.”
Senate Republicans, meanwhile, are expected to introduce a tax holiday bill, even though bills introduced this late in the session are typically sent to the Senate Rules Committee The Republican proposal faces a difficult road.
The Senate bill, sponsored by Senate Majority Leader Stephen S. Hershey Jr. (R-Upper Shore), is not yet drafted. Bills introduced this late into the session are typically sent to the Senate Rules Committee, where they sit without a vote. Hershey said he will ask to suspend the rules and have the bill sent directly to a standing committee, but the Democratic supermajority in the Senate is not obligated to honor the request.
“We think it’s well worth the conversation,” Hershey said.
It’s also unlikely House Republicans will succeed in their efforts, since actions on those bills must either raise revenues or cut spending.
Republicans are undeterred, but the notion appears to have little support so far. Senate President Bill Ferguson (D-Baltimore City) had not seen details of the proposal and declined through a spokesperson to comment Thursday. House Appropriations Chair Ben Barnes (D-Prince George’s and Anne Arundel) also declined comment.
But a spokesperson for Gov. Wes Moore (D) blasted the proposal.
“Marylanders need real relief, not a 30-day gas tax suspension that would blow a $100 million hole in our transportation budget while we’re working to close Maryland’s budget shortfall,” said Ammar Moussa, the spokesperson.
“If Maryland Republicans are serious about lowering costs, they should pick up the phone and call Donald Trump and tell him to end this missionless war — instead of asking Maryland taxpayers to help pay for it,” said Moussa, citing reports that the war is costing more than a billion dollars a day and driving up prices. “The best way to bring prices down is to address the source of the pain, not shift the cost of Donald Trump’s war onto Maryland families.”
While Republicans acknowledge prices have climbed since the start of military action, none would break with the president, criticize the war or call for an end to the conflict.
“I’m not going to speak for anybody else, but I would say, based on the intelligence we’ve seen, I have zero … problem with targeting Iran in the way that we’re targeting,” Ready said. “I think that, to me, it’s a frustrating situation we find ourselves in national politics where, because of who the president is, one way or the other, I don’t think you should have a knee-jerk reaction.”
The latest Republican proposal was not available for review. But it appears similar to legislation passed in 2022, when gas price averages jumped above $4 a gallon for regular. The gas tax when was 36 cents a gallon, meaning a car with a 15-gallon tank would save a little more than $5 a fill-up. Assuming a weekly fill-up, the savings would be about $22 over 30 days.
A gas-tax holiday does not come without cost to the state.
Much of the state gas tax is funneled into the beleaguered Transportation Trust Fund, which is already struggling to pay for a backlog of highway and transit projects. Gas tax revenues continue to erode, with increased use of more fuel-efficient and electric vehicles, as well as a greater number of people who work from home.
Costs for the 2022 forbearance approached $100 million, but legislative leaders and then-Gov. Larry Hogan were able to use $100 million in surplus funds — part of a $7.5 billion COVID-era surplus — to backfill the gap.
That was then.
Today, the state faces lean budget times as it works to finalize a budget that will erase a projected $1.5 billion structural gap. The $2.2 billion rainy day fund in this year’s budget is above the 5% statutory minimum. But at 8% of revenue, it is at the edge of the kind of reserve levels with which some bond rating agencies have been comfortable.