DLS Suggesting Highway User “Swap” For General Fund Relief

As reported earlier today, the Department of Legislative Services (DLS) has recommended that the General Assembly eliminate the extra local transportation funds provided in the Governor’s proposed budget, to be distributed to local roads and bridges. They recommend only continuing funding current funding levels.

In a Senate budget subcommittee briefing, DLS staff indicated that they will be recommending using the Governor’s proposed “capital grants” to backfill a proposed cut to traditional formulaic highway user revenues to counties. They will propose diverting those funds to fill gaps in the General Fund supporting the Maryland State Police. More on those recommendations will apparently come later in subsequent budget hearings.

But what about the “lockbox” law that Maryland voters passed by referendum in 2013, prohibiting the use of Transportation Trust Fund transfers to balance the General Fund? Surely that protects diversion of highway user revenues, which flow from the Transportation Trust Fund?

No so. The “lockbox” law includes an exemption for highway user revenues. Under the Maryland Constitution,  Article III – Legislative Department,  Section 53:

[T]he funds in the Transportation Trust Fund may be used only:

(1) For the purpose of paying the principal of and interest on transportation bonds as they become due and payable; and

(2) After meeting debt service requirements for transportation bonds, for any lawful purpose related to the construction and maintenance of an adequate highway system in the State or any other purpose related to transportation. ….

This section does not apply to an allocation or use of highway user revenues for the counties, municipalities, or Baltimore City that is authorized under Title 8, Subtitle 4 of the Transportation Article[.]

At today’s hearing, Maryland Transportation Secretary Pete Rahn testified that he disagreed with the proposal, in part because it runs against the intent of the “lockbox” law. Did voters realize, when they voted for this Constitutional amendment, that it would not protect against raiding funds for local roads and bridges – 83 percent of the cited “highway system in the State?”

Seems unlikely.