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O'Malley Unveils Gas Tax Plan Resembling Virginia's

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A sales tax on the wholesale price of gasoline would generate more revenue than a flat gas tax.
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A sales tax on the wholesale price of gasoline would generate more revenue than a flat gas tax.

Maryland Gov. Martin O'Malley has unveiled his much-awaited plan to raise taxes to fund transportation projects in the state.

The plan bears more than just a passing similarity to what was passed on the other side of the Potomac River by the Virginia General Assembly. O'Malley wants a 4 percent sales tax on the wholesale price of gasoline.

He is not, however, eliminating the tax like what was done in Virginia.The plan would merely cut the tax rate on the price of gas per gallon from 23.5-cents a gallon to 18.5 cents.

Maryland's neighbor to the south was on the mind of just about everyone as the proposal was unveiled.

"Virginia, which is a very conservative state, just passed a transportation program which we're all aware of... because they know for the competition for the D.C. suburbs," says House Speaker Mike Busch. "The D.C. suburbs is the number one congested area in the state of Maryland. And I believe that if we want to compete for the job market in those suburbs, we need to compete with a transportation plan."

Money raised by the new tax, estimated to be about $3.4 billion over the next five years, would fund several projects. Most notably, funds would go towards the Purple Line, which would span both Montgomery and Prince George's Counties.

Both Speaker Busch and Senate President Mike Miller appeared with the governor last night at the unveiling of the proposal, in hopes of signaling broad support for the plan in their respective chambers.

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