In its overview budget analysis of the Department of Transportation, the Department of Legislative Services (DLS) recommends transferring a portion of the corporate income tax and the general sales tax that currently funds the Transportation Trust Fund (TTF) to the General Fund (GF) and giving the approximate $350 million of HUR that has been transferred to the GF back to the TTF.
From the DLS analysis:
Time to True Up General Fund and Transportation Trust Fund Revenues
The TTF now receives a share of revenues that have traditionally been dedicated to the general fund but sends some of those revenues back to the general fund through the HUR formula. To simplify the funding interrelationships, DLS recommends returning a portion of the corporate income tax and the entire general sales tax distribution from the TTF to the general fund and that the general fund distribution of HUR be retained entirely by the TTF in fiscal 2013. Exhibit 21 provides a summary of the proposed changes.
As shown in the exhibit, the $100 million from MDOT would still occur in fiscal 2012; however, unlike the Governor’s proposal, the department would be repaid the $60 million from fiscal 2013 to 2016. The $40 million transferred to the Rainy Day Fund would be resolved through a separate action that would sweep $40 million in revenue at the end of fiscal 2011 to the TTF in fiscal 2012 while still maintaining the 5.0% balance for the Rainy Day Fund. The proposal would also hold the local jurisdictions harmless. To provide the General Assembly an opportunity to make a decision, DLS recommends that a BRFA provision be added to true up general fund and TTF revenues by taking a portion of the corporate income and all general sales tax out of the TTF and to give the TTF the general fund distribution of HUR.