Task Force Discusses Local Funding Options For Transportation

The Local and Regional Transportation Funding Task Force held its third meeting on October 22 to discuss local transportation funding options. While a representative from the Metropolitan Washington Council of Governments spoke on regional coordination in Virginia, most of the meeting focused on revenue options local governments could use to fund transportation projects, including transit.

During the meeting, the Maryland Department of Transportation staff outlined six revenue options local governments could use to generate transportation revenue.  These include authorizing local governments to do the following:

  • Impose a $20 per year vehicle registration fee generating $96 million per year;
  • Increase the rate of the local income tax by .05%, including those jurisdictions at the maximum rate, generating $105 million per year;
  • Impose a 0.35% transfer tax generating $97 million per year;
  • Impose a local gas tax of 3.5 cents per gallon generating $100 million per year;
  • impose a local sales tax of .0125% generating $99 million per year; and,
  • Increase the local property tax rate by 0.015 per $100 generating $96 million per year.

For discussion purposes and ease of calculation, all rates were set at a level that would generate approximately $100 million in revenue.  The vehicle registration, income tax, and transfer tax options were further broken down into county and municipal figures.

Following the presentation, task force members discussed which options should be considered further and which ones should not.  Both the local option sales tax and gas tax have been removed from consideration.  The other four options will be discussed further at the next meeting.

During the discussion Senator George Edwards was very supportive of a restoration of Highway User Revenue.  He stated he supports the recommendations of the Blue Ribbon Commission on Maryland Transportation Funding, which recommended an incremental restoration of HUR, and that 1% of the gas tax should be given back to local governments.  He also suggested that the group consider creating two transit districts, one for the red line and one for the purple line, and freezing transit spending in those areas. The jurisdictions within the transit districts would be responsible for raising additional revenue for transit, ultimately freeing up some transit dollars within the transportation trust fund to be used for roadways.

The next meeting of the Task Force will be held on Monday, November 4 from 2:00 pm to 5:00 pm and the group will continue to discuss options for financing and funding local transportation network. The group will also further explore Tax Increment Financing opportunities and review the successful elements of regional transportation authorities.

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