MDOT Releases Draft Six-Year Capital Budget, HUR “Cliff Effect” Looms

This week, the Maryland Department of Transportation (MDOT) released its Draft FY 2022 – FY 2027 Consolidated Transportation Program (CTP), which details MDOT’s $16.4 billion six-year capital budget.

The Draft CTP reflects a $1.2 billion increase compared to the $15.2 billion Final FY 2021 – FY 2026 CTP released in January. The largest drivers of the revenue increase in the Draft CTP include COVID relief funds totaling $841 million and revenue growth totaling $488 million.

According to a press release:

More than half of the $16.4 billion is budgeted for preserving aging infrastructure. This funding is critical to bring roads, bridges, rail, port and airport facilities, and other infrastructure into a state of good repair.

Major projects continue to move forward with funding in the Draft CTP as well, including the Purple Line, American Legion Bridge, Howard Street Tunnel, the A/B Connector at Baltimore/Washington International Thurgood Marshall Airport, the I-695/I-70 “Triple Bridges” and I-695 Traffic Relief Plan. These major projects contribute directly to the region’s economic recovery.

MDOT will hold meetings with each county and Baltimore City from September 20 through November 10 to discuss the Draft CTP with local leaders and the public. Each jurisdiction will determine if the meetings will be in person, virtual, or both.

Highway User Revenues

Highway User Revenue (HUR) is the share of State motor fuel and vehicle taxes distributed to local governments for their own road and bridge maintenance.

Like most states, Maryland has no local gas taxes – the State levies all these revenues. However, unlike most states, local governments actually maintain most roads (about 5 of every 6 road miles) in Maryland. Recognizing this, the State has historically shared a portion of these revenues, through a formula, to counties, municipalities, and Baltimore City to maintain their own roads and bridges.

The State created the HUR formula in 1968. For more than forty years afterward, local governments had received at least 30 percent of transportation revenues — mostly motor fuel tax and vehicle registration fees — to fund their roads and bridges.

The Great Recession forced cuts to this area deeper than those in any other component of the state budget. Twenty-three counties’ share of funds plummeted from nearly $300 million in 2007 to only $40 million in 2018: an 87 percent decimation. In 2018, Baltimore City alone received nearly $100 million less than it did before the cuts.

A 2018 MACo Legislative Initiative increased the county share of HUR for five years, from FY 2020 through 2024, from 1.5% to 3.2%, with additional funding also supporting Baltimore City and municipal governments.

“Cliff effect” on the Horizon

Following a multi-year advance in local funding, beginning in fiscal 2025, state funding for local roads and bridges reverts to the totals in place before the enactment of Chapters 330 and 331 of 2018.

In recent years, MACo has supported legislation to extend and revive the local distribution of transportation revenues, but to no avail. As it stands, state funding for local roads and bridges will plummet by $76.8 million in fiscal 2025.

MACo, the Maryland Municipal League (MML), and other key stakeholders will continue efforts to avoid this dramatic “cliff effect” in state funding — and advocate for the full restoration of local transportation funding.

Stay tuned to Conduit Street for more information.

Useful Links

Draft Maryland Consolidated Transportation Program FY 2022 – FY 2027

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