Hogan: Highway User Revenue Phase-In Will Be In My Budget

During his pre-session announcements yesterday, Governor Larry Hogan made good on a pledge he had launched consistently through the past year — he will put the first year of a phased-in increase of Highway User Revenues into his proposed FY 2017 budget. This share of gas taxes and motorist revenues – provided to local governments for decades prior to a redirection during the great recession in 2009 – historically has supported the approximately 83% of road miles maintained by local governments.

According to the Washington Post: “Hogan called for increasing the amount of highway-user revenue allocated to local jurisdictions for transportation projects by 19 percent, to $231 million.” That figure roughly represents the first step of an eight-year phase-in of the historic 30% funding levels.

Governor Hogan introduced, and both MACo and MML supported, 2015 legislation to put the 8-year phase-in into law. While the bill did not pass, the Governor is still empowered to make spending decisions in the proposed budget, and the recent announcement reinforces his stated intention to fulfill that phase-in plan.

The fiscal note on last year’s introduced bill reviews the history of shared transportation revenues, and the inception of the Highway User Revenue sharing formula that dates back to the establishment of the state’s consolidated Transportation Trust Fund:

Since the early 1900s, the State has shared motor vehicle-related revenues with the counties and Baltimore City. Initially these revenues consisted of vehicle registration fees. In 1927, when the gasoline tax increased from $0.02 to $0.04 cents per gallon, the State began sharing these taxes with local governments. In 1968, the General Assembly approved
legislation that established a formula for apportioning the county and municipal shares of highway user revenues. The legislation also initiated the sharing of motor vehicle titling
taxes with the subdivisions. Legislation enacted in 1970 created the Maryland Department of Transportation (MDOT) and a consolidated Transportation Trust Fund (TTF). As
provided by that legislation, the State shares with the counties, Baltimore City, and municipalities those revenues credited to the Gasoline and Motor Vehicle Revenue
Account in TTF, more commonly referred to as “highway user revenues.” Currently, the revenues dedicated to the account include all or some portion of the motor vehicle fuel tax,
vehicle titling tax, vehicle registration fees, short-term vehicle rental tax, and State corporate income tax.

MACo has again adopted restoring local roadway funding as its top priority for 2016:

Local Transportation Funding Restoration

Restoring local Highway User Revenues (HUR) has been a MACo priority since the local share was slashed during recession-driven budgets. The former $555 million share has been drastically cut back to $167 million – with a mere $26 million to be shared among 23 county governments. The cumulative loss of local roadway investment has topped $2 billion – compromising roadway safety and betraying taxpayer expectations. With the recent expansion of transportation revenues and additional funds recently being allocated for roads and bridges, it is now time for local governments to again play a more significant role in the State’s transportation funding plan. MACo advocates for the restoration of local transportation funding.

Michael Sanderson

Executive Director Maryland Association of Counties
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