Eastern Shore Faces Transportation Funding Challenges

An article in the Salisbury Daily Times discusses lost Highway User Revenues and the effect on Eastern Shore counties.

Because the money for highway user fees comes from the 23.5 cent tax on gasoline, counties originally got their share back, but because of the recession and policy decisions in Annapolis, that has changed within the past five years.The largest drop in return came in fiscal year 2010 when Wicomico County went from receiving $6.2 million to $600,000. Worcester County moved from $4.4 million to $428,000, and Somerset County went from $2.4 million to $242,000.

Although revenues going into the Transportation Trust Fund have increased and counties are expected to see an increase in funding,

“It’s unlikely that counties will see any meaningful return on highway user revenue,” said County Administrator Wayne Strausburg, adding he expects the return of highway funds to stay at about 10 percent of pre-2008 levels.

He said increasing the tax base by enticing new businesses and encouraging businesses already here to expand and hire is the best way to do so. In order to do that, county leaders have begun working with state officials to decouple the property tax rate from the personal property tax rate. If successful. the personal property tax on businesses would not increase two-and-a-half times every time the property tax is increased.

Decoupling the personal property tax from the real property tax is one of MACo’s initiatives for the 2013 session.