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Monday, January 30, 2012

O'Malley's Gas Tax Gambit

Everyone was waiting for Governor O'Malley's gas tax proposal - conspicuously absent from his recent budget submission - but few could have anticipated that O'Malley would propose adding a 6% sales tax to gasoline and effectively add $0.21 per gallon over the next three years.

This is, of course, a ludicrous proposal. No member of the General Assembly elected by a victory margin of less than 10 percentage points would even consider such an increase - especially when coupled with the other tax increases proposed by O'Malley.

But O'Malley has no expectation of a $0.21 per gallon tax increase - rather O'Malley has decided to give the General Assembly political cover and make whatever gas tax increase they ultimately pass seem like a bargain for state residents.

Most folks were anticipating a proposed increase of $0.15, in line a state commission’s recent recommendation. Senate President Mike Miller has argued a $0.10 tax increase was more reasonable. More reasonable compared to $0.15? Maybe. But compared to $0.21? Absolutely.

So do not be fooled. Governor O'Malley does not expect the Assembly to increase the gas tax by $0.21 per gallon. Rather he thinks the $0.21 per gallon proposal will make residents thankful when the Assembly approves an increase of "only" $0.10 or $0.15.  Wait and see how long it takes for members of the Assembly to step forward and "challenge" their governor by expressing firm opposition to the proposal... and then support for a "much lower" or "more reasonable" increase.

It's a cynical ploy, but one that will likely work. Unfortunately, it will be another regressive tax passed on to working families and another hit to the recovering economy. Between gas taxes, flush taxes, and higher tolls it becomes harder and harder to see how working class families will be able to recover from the Great Recession (remember when Democrats represented working families?). It also becomes harder to see any indication that O'Malley cares... his attention seems to have shifted to 2016 and the Democratic presidential primary.

O'Malley's 2012 agenda for the state must be giving Lt. Governor Anthony Brown serious heartburn - as he'll be the one asked to defend the record should he seek the Democratic nomination for governor in 2014.

O'Malley may help Republicans accomplish something that they have been unable to do on their own - become competitive with Democrats statewide. Major elements of O'Malley's agenda are opposed by majorities in the state and his positive approval rating is driven entirely by voters in Baltimore City and Prince Georges County according to a recent Post poll.  Though Democrats continue to maintain a clear voter registration advantage over Republicans the annual voter registration report from the State Board of Elections shows the Democratic and Republican voter rolls shrank while unaffiliated registration grew - but in Maryland, most unaffiliated voters vote Republican. Likewise, though Democrats dominated statewide and federal elections in 2010, Republicans won 50% of all local offices for the first time since... the Civil War.

Two party competition is slowly coming to Maryland, O'Malley seems to have committed himself to hastening its arrival.