DLS Analyzes Local Spending on Transportation Projects

The Department of Legislative Services (DLS), in its budget analysis for the State Highway Administration (SHA), raised a number of issues dealing with local governments. The SHA analysis also includes an overview of local highway user revenues.

The first issue raised deals with local involvement in State projects.  From the analysis:

Currently,there are no policies or procedures for how local jurisdictions contribute to State projects. For example, if a local jurisdiction provides funding for a local priority project that may not correspond to the
State’s priorities, will the State fund that project over other priorities?
In addition, the local funding cash flow is not reflected in the CTP. MDOT indicates that from the fiscal 2008 to 2012 time period, local jurisdictions contributed$148.3 million, or 9.2% of the total project cost, to State highway projects. Of that amount, cities and towns contributed $10.6 million, and 14 counties contributed $137.7 million during this time period. The counties that contributed the most were Howard County, with $43.8 million, and Montgomery County, with $65.7 million.
 Given the funding that is already contributed to these projects and the expressed desire to have more local contributions, DLS recommends that MDOT discuss its process for allowing/obtaining contributions from local jurisdictions for a project, and how the funding is reflected in the CTP. In addition, DLS recommends that committee narrative requesting a report be adopted.
The second issue summarizes an analysis by DLS of the effect highway user revenue reductions has had on local transportation spending in the State.

Aggregate local transportation expenditures increased by 11.6% between the two reporting periods (fiscal 2007 to 2009 and fiscal 2010 to 2011). County expenditures increased by11.0% and Baltimore City expenditures increased by 24.2%; however, in the aggregate municipal expenditures decreased slightly (-0.3%).

Data for counties and municipalities shows no strong correlation between average local HURs funding as a percentage of transportation expenditures in peak years and the change in average transportation expenditures since HURs were significantly reduced. Additionally, an entity’s population size and tax actions since HURs were reduced appear not to have influenced the overall change in average transportation expenditures.
15 counties decreased their average transportation expenditures since local HUR were significantly reduced after fiscal 2009. Six counties (Calvert, Caroline, Queen Anne’s, Somerset, Wicomico, and Worcester) each decreased their average annual transportation expenditures by at least 20.0%.
Anne Arundel County, Baltimore City, and Montgomery County showed average transportation expenditure increases of at least 20.0% over the same period. Expenditures for these three jurisdictions total $151.2 million, which is greater than the overall increase in local transportation spending.

Of 166 municipalities and special tax areas that submit a uniform financial report, 84 reported average transportation expenditure increases and 82 reported decreases since local HURs were reduced after fiscal 2009.

The table comparing local transportation spending from fiscal 2007 to 2009 and fiscal 2010 to 2012 can be found here.