Senate Transportation Package Signals Consensus

With its votes yesterday to pass the identical transportation financing legislation already passed by the full House of Delegates, the Senate Budget and Taxation Committee has signaled to stakeholders that an approval of that identical bill may eliminate any need for reconciliation of differences (through a conference committee, sometimes used on complicated legislation to reach compromise). From coverage in the Baltimore Sun (limited free views available):

The Senate Budget and Taxation approved 9-4 a bill that increases gasoline taxes for the first time in more than 20 years. It would raise an estimated $4.4 billion over six years, cash that would be dedicated to road and transit projects.

The new sales tax on gas, which could rise to 6 percent, would be tied to inflation and is expected to generate more than $660 million for transportation each year. The bill would also increase fares on mass transit.

In addition to the revenue increases, the Committee also unanimously passed a proposed “lockbox” constitutional amendment, to ensure that dedicated transportation funds may not be used for other purposes without an extraordinary process. From MarylandReporter.com:

The committee also unanimously passed a bill proposed by Senate President Mike Miller that would create a lockbox for the Transportation Trust Fund, prohibiting the state from using that money for non-transportation purposes. The only exception would be when the Governor declares a fiscal emergency and a three-fifths majority of both houses of the General Assembly agree that the transportation trust fund may be used for other purposes.

See online information about HB 1515 (the transportation financing bill), and SB 829 (the “lockbox” legislation).

Neither the funding bill nor the lockbox proposal have a direct effect on local distributions of Highway User Revenues, a deep budget reduction taken during the depths of the recent recession. HB 1515 does alter the base motor fuel tax rate, but it makes special provisions to place the increased rate of that tax (through indexing to inflation) directly into the state trust fund, rather than the decades-long law of placing gas tax revenues into an account shared by formula with counties, Baltimore City, and municipalities. Similarly, the lockbox provisions protect the state’s transportation revenues from being diverted to the general fund (or other state uses outside transportation), but do not shield against even further cuts to Highway User Revenues. This local funding, increasingly referenced as simply optional “grants,” has been largely redirected to state needs — supporting the state general fund for several years, and more recently providing relief to the state’s own transportation projects.

During the Senate Committee hearing on HB 1515, the Governor’s Chief of Staff did indicate that options to restore and protect highway user revenues would be a topic of an ongoing study that is directed by the bill. While MACo had joined the Maryland Municipal League in suggesting modest refinements to the bill as advanced by the House, the Senate Committee rejected all amendments offered, including one to retain the use of the shared account for all motor fuel tax revenues. Senator Colburn offered the amendment during the voting session.

Procedurally, rejecting all amendments offered by the second chamber to consider any bill makes the path toward passage simpler. This perception is reinforced by an observation on MarylandReporter.com:

At the end of the voting session, Budget & Taxation Committee Chair Ed Kasemeyer said, “It’s a frustrating bill to deal with,” but he did not explain why. Lobbyists trying to change the bill had been told that House leaders did not want the gas tax hike sent back with any amendments.

Michael Sanderson

Executive Director Maryland Association of Counties
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