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Md. governor, comptroller differ on providing relief at the pump

FILE – Gasoline prices are displayed at a gas station in Vernon Hills, Ill., Friday, April 1, 2022. The dollars-and-cents counter on the gas pump seems to be spinning faster these days with U.S. gasoline prices hitting another record high on Tuesday, May 10. (AP Photo/Nam Y. Huh, File)

Maryland Gov. Larry Hogan is urging state Comptroller Peter Franchot to take action and soften the impact of an increase to the state’s gas tax.

In the letter he sent to Franchot, Hogan asked the comptroller to “use every legal and regulatory power at your disposal” to halt or minimize the impact of a gas tax increase.

Some actions Hogan said could be considered include granting an extension for paying the taxes and removing penalties for unpaid tax, including revocation of business licenses.

Hogan said that taking action would be in line with previous actions by Franchot, including the January extension of deadlines for filing and paying individual income taxes.

In a letter, Franchot responded to Hogan, agreeing that increasing taxes on residents in the current economic climate is both “morally and economically irresponsible.” He called on Hogan to declare a state of emergency and suspend the gas tax until September.

In March, Hogan and state lawmakers approved a plan for a 30-day “gas tax holiday.” At the time, Franchot proposed extending that tax break for 90 days.

Both men have criticized the state’s gas tax structure, which under a law passed in 2013, includes automatic increases tied to the consumer price index.

Hogan said he proposed legislation to permanently suspend increases to the state’s gas tax. In the latest General Assembly session, Hogan also said it was “even more unfortunate” that lawmakers failed to pass bills to repeal a portion of the tax and to suspend the increases through 2024.

Franchot referred to Maryland’s “unfortunate statutory provision” that triggers the automatic tax increase, but he also agreed with Hogan that the state is currently in a strong financial position to forgo revenues from the tax increase temporarily.

Maryland is currently on track to see the gas tax go from roughly 37 cents a gallon to nearly 44 cents a gallon under the current tax structure.

Asked about Hogan’s call for the comptroller to act, Susan O’Brien, a spokesperson for Franchot, said in a statement: “The Governor’s Office is misinterpreting state law. There is no provision that allows the Comptroller to unilaterally halt or suspend the automatic increase to the gas tax. Delaying motor fuel tax returns, as the governor seems to be suggesting, would have no impact on consumers who are suffering at the pump. It would only help Big Oil delay their tax payments.”

According to Michael Ricci, a spokesperson for Hogan, Franchot has taken action in the past to provide tax relief to Marylanders:

  • In September 2021, Ricci said, Franchot extended due dates for tax and gas payments by businesses and emergency responders affected by Hurricane Ida.
  • In June 2021, he extended the filing deadline for pass-through entities.
  • In March 2021, he extended tax filings and waived tax interest for farmers and fishermen impacted by the RELIEF Act.
  • In March 2021, he granted additional time for tobacco floor tax payments.
  • In March 2020, he suspended limits on purchasing beer and distilled spirits to aid Maryland’s craft alcohol manufacturers, as well as credit control reporting requirements of alcohol distributors to level the playing field for retailers.
  • In January 2019, he reduced or suspended federal contractor and employees tax payment plans because of the federal government shutdown.

According to AAA, Monday’s average price for a gallon of gas in Maryland was $4.61.