Transportation Commission Preliminarily Recommends Restoring Highway User Revenues Over Five Years

The Blue Ribbon Commission on Maryland Transportation Funding met on October 11 to discuss and take action on revenue funding options for transportation.  To generate discussion, the Commission considered six different funding scenarios, three, which generated revenue  to meet State identified transportation needs and three, which also included the restoration of local Highway User Revenues (HUR).   These funding scenarios were comprised from a “Menu of Funding Components” which included 1) increasing the gas tax, vehicle registrations, titling tax, and MVA fees; 2) applying the sales tax to the retail price of gas; 3) increasing the sales tax and applying the sales tax to vehicle repair services; and 4) increasing the State’s real property tax.

Although the Commission will not formally adopt their recommendations until its October 25 meeting,  there was much discussion over the restoration of $350 million in local HUR and consensus that it be restored back to previous levels over a five-year period.  As reported by MarylandReporter.com:

In past years, the state shared about 30% of its transportation money with counties and municipalities.

Dwindling state revenues and growing needs has sliced that percentage and swiped funds from the local governments. Currently, the state only gives local governments 10% of its funds for local transportation projects. Additionally, in trying to balance the state’s budget, money is often “borrowed” from these local funds. It is seldom, if ever, paid back.

Senate Majority Leader Robert Garagiola said that the commission should definitely work to restore the funds that local governments depended on. After all, he pointed out, people drive on local roads as much as they do state roads. Nobody differentiates between them.

“My recommendation is that we have language to phase in a funding change that will get us back to the 70/30 split we used to have,” he said.

The recommended phase-in would likely be over five years, commission members said.

Revenue generating recommendations to meet the State identified needs and restore local HUR include the following:

  • A total 15-cent gas tax increase, phased in over three years. At the end of the phase-in, the increase would bring in $491 million annually.
  • A 50% increase in vehicle registration fees, which would raise $165 million a year.
  • Increasing the titling tax rate from 6% to 6.5%. This would earn $69 million a year.
  • Doubling the fee for emissions testing from $14 to $28. This would raise $22 million a year.
  • Increasing miscellaneous MVA fees, which would bring in $34 million annually.
  • Increasing MTA fares and ending funding of free rides out of the transportation trust fund. This would earn $25 million a year.
  • Indexing gas tax increases to inflation after three years, so the new funds keep pace with the economy.
As mentioned previously,  the Commission plans to hold its final meeting on October 25 in Annapolis to formally adopt its recommendations.  As reported by the Baltimore Sun, the Commission will maintain its  number one recommendation from the February 18 report, “Protect the Transportation Trust Fund.”

Gus Bauman, the panel’s chairman, said the commission’s top recommendation will be for state officials to end the practice of steering money away from the state’s Transportation Trust Fund to fill other budget holes. Bauman said the panel will recommend a constitutional amendment ending the practice.

“It cannot be diverted as they’ve been doing in past years to other purposes of the government,” Bauman said. “That is the core recommendation of this group.”

Meeting coverage can also be found at Gazette.net.

Previous meeting coverage of Blue Ribbon Commission on Maryland Transportation Funding can be found on the MACo blog.

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