Lower Gas Prices Yield Lower Transportation Revenues

According to the Maryland Department of Transportation (MDOT), the decline in gas prices has reduced projected revenues generated from the Transportation Infrastructure Investment Act (TIIA) of 2013 by a total of $369 million. The TIIA enacted during the 2013 session  was estimated to raise $4.4 billion over six years by indexing the motor fuel tax for inflation and phasing in up to a 5% sales tax on the wholesale price of gasoline. Instead, it has generated just over $4 billion.

MDOT discussed the status of these revenues and the effect of eliminating future CPI increases and sales tax increases before the House Ways and Means Committee on January 20. MDOT projects that ceasing both of these components would reduce funding by nearly $3 billion.

While the final consolidated transportation plan (CTP) for fiscal 2015 is lower than expected, most of this reduction is being offset by federal funds. State funds in the CTP have declined by $596 million, but federal funds have increased by $488 million.  This combined with an increase in other funding yields a shortfall of $83 million.  The final CTP of $15,843 billion declined slightly from the draft CTP of $15,926 billion.

MDOT’s briefing document provides more detailed information.