Spending Affordability Committee Discusses State’s Transportation Program, Debt Policy, and Captial Program

The Spending Affordability Committee, composed of members of the General Assembly and three public members, was briefed by the Department of Legislative Services (DLS) on November 17 regarding the State’s transportation program, debt policy, and capital program.    Considerable discussion during the meeting focused on what the State could do to boost jobs in the construction industry by financing school construction and transportation projects.  As reported by MarylandReporter.com:

The state could accelerate its bond offerings – essentially maxing out its credit card and reducing what the state could spend in future years. The legislature could also pass “revenue enhancement” – tax hikes and almost any would do. The state could find more public-private partnerships to finance projects, and the government could stop using bond debt to replace special funds for open space, highways and bay restoration.

House Speaker Michael Busch said the question was, “What’s the best way we can create jobs and what’s the fastest way to do it?”

If there are going to be “revenue enhancements” (tax hikes), Busch said they need to be tied to projects that citizens can see – a road, a bridge, a school.

With respect to transportation, DLS reported that the Transportation Trust Fund ended fiscal year 2011 with a fund balance of $221 million, $121 million greater than expected, due to higher revenue attainment.  DLS also provided projections for the local share of Highway User Revenues (HUR) as specified by the current formula distribution and with a restoration of HUR as recommended by the Blue Ribbon Commission on Maryland Transportation Funding (BRC).

Under the current formula distribution, local governments would receive just over $1 billion in HUR from FY 2012 to FY 2017.  Should the recommendations of the BRC be fully implemented, local governments would receive additional revenues of almost $2.8 billion to restore the HUR local distribution back to the historical 30% share and through the sharing of the additional state revenue tied to increases in the gas tax, registration fees and titling tax.

In addition to these discussions, DLS provided an overview of the following issues:

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