State Officials Raise Importance of Restoring Local Roads Funding

During Wednesday’s Capital Debt Affordability Committee (CDAC) meeting on debt authorizations, state officials acknowledged the importance of restoring Highway User Revenues (HUR) to local governments for the maintenance of local roads. During the meeting, CDAC, discussed the outcomes of the CDAC Workgroup report on the Maryland Department of Transportation (MDOT) Affordability Limits and approved a response to the legislature on the topic.

The April 2016 Joint Chairmen’s report requested MDOT to work with CDAC to develop affordability criteria that may be used to ensure Consolidated Transportation Bond debt remains affordable vis-a-vis Transportation Trust Fund Revenues. The Chairmen’s Report stated,

The committees are concerned about the increasing share of Transportation Trust Fund revenues being consumed by debt service payments on Consolidated Transportation Bond [CTB] Debt. . . Given that CTB debt is part of total State tax-supported debt and total State tax-supported debt is approaching the State’s affordability limits, it is desirable that CTB-specific affordability criteria be developed.

Ultimately, CDAC approved a message in response to the Joint Chairmen’s Report stating,

Since rating agencies/investors are satisfied, MDOT’s existing ABTs [Additional Bond Tests] and statutory limits are sufficient to keep MDOT’s debt affordable for the State; therefore, no affordability criteria is needed.

Treasurer Kopp voted against this response, and spoke in favor of a response requesting MDOT to further study the issue and choose a workable ratio it can use as an additional debt management tool.

During the discussion of transportation debt, State Comptroller Peter Franchot raised the topic of restoring Highway User Funds, saying that restoration should be a top priority for the state, that the funds are critical and well spent by the locals. Maryland Secretary of Transportation Pete Rahn followed, saying the department would be supportive of restoring the funds, while Budget Secretary David Brinkley said that the Governor is committed to working in that direction.

Restoring local Highway User Revenues 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.

Read more on Highway User Revenues from Conduit Street:

End of Session Wrap-Up

MACo and MML’s Letter to the Editor of the Baltimore Sun

Why The Fuss Over HUR?

 

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