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For Immediate Release:

Transportation Infrastructure Investment Act
of 2013 Fast Facts

March 15, 2013

Erin Henson

The Proposal

  • The proposal (HB 1515/SB 1054) developed by the Governor and legislative leadership will generate an average of $800 million annually at full implementation in 2016. 

  • If enacted, it will create an additional transportation investment of $3.4 billion over the next five years (FY 2014-FY 2018), and create or support more than 44,000 jobs. 

How It Works

  • Effective July 1, 2013: 

    • Reduce the State tax on gasoline by five cents from 23.5 cents per gallon to 18.5 cents per gallon.

    • Index the 18.5 cents per gallon state gasoline tax to the Consumer Price Index (CPI) to adjust for inflation.

    • Apply 2 percent of the state sales tax on the wholesale price of gasoline.

  • Effective July 1, 2014: 

    • Increase to 4 percent the state sales tax applied to the wholesale price of gasoline.

    • Index transit fares charged by the Maryland Transit Administration (MTA) to the CPI.

    • State Treasury to issue General Obligation Bonds for federally required environmental improvements undertaken by the State Highway Administration (SHA).

  • Effective July 1, 2015: 

    • State transportation to receive revenue generated by implementation of the federal Marketplace Fairness Act. (Provided passage by Congress - enables states to require internet sellers to collect sales taxes.)

Impact on Gas Price at the Pump

  • On July 1, 2013

    • Effective rate of the gas tax will increase from 23.5 cents to 25.2 cents per gallon, by:

      • reducing the gas tax 5 cents from the current 23.5 cents to 18.5 cents per gallon (pg);

      • applying the CPI to 18.5 cents (0.4 cents based on $3.56 pg); AND

      • applying 2 percent sales tax (6.3 cents based on $3.56 pg).

  • In the first year, the tax on a gallon of gas will increase by less than two cents.  To demonstrate the potential impact, let’s assume gas at the pump is $3.56 on June 30, 2013. Here is what you would see at the pump:

    • June 30, 2013 - $3.56 per gallon

    • July 1, 2013 - $3.58 per gallon

  • In the second year, the 2 percent sales tax would go to 4 percent, resulting in total increase of 9 cents per gallon.

    • July 1, 2014 - $3.65 per gallon

  • Why reduce the gas tax to the pre-1992 level of 18.5 cents?

    • To lessen the impact of this change on consumers in the near-term.

Impact on Transit Fares

  • On July 1, 2014

    • MTA’s one-way fare projected to increase 10 cents to $1.70 from the current $1.60.  The legislation also sets forth a very minimal floor of periodic CPI adjustments for MTA fares every three years.

The Need

  • Because Maryland’s flat 23.5 cent per gallon gas tax has not changed since 1992, the purchasing power of the gas tax has dropped nearly 70 percent. A dollar for transportation in 1992 is worth about 30 cents today.

  • Maryland is running out of money to build transportation improvements,  just as citizens face some of the worst traffic congestion in the nation.

  • By 2017, SHA’s budget for new expansion projects will drop to virtually zero.

  • Without new revenue, plans to replace transit equipment required to improve the reliability of bus, MARC, Metro and light rail systems will be delayed.  In the Washington region, the ability to improve WMATA service would also be impacted.

  • Beyond transit and highways, the competitive position of the Port of Baltimore and its 14,000 direct jobs would be in jeopardy if funding is not available to dredge and keep channels clear or create new dredge placement sites in the Baltimore Harbor that could eventually become the Port of Baltimore’s next major terminal.

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