Transportation budget cuts have been a high-profile issue for the 2024 General Assembly session – including proposed reductions to Highway User Revenues that support local roads and bridges. An early session briefing on local effects, a staff analysis of the trends, and a bit of digging can help put this major issue into its full and fair context.

As Conduit Street readers and county officials already know – the State faces a shortfall in its consolidated Transportation Trust Fund, and while the Governor has announced a one-time infusion from the State general fund to maintain services for the coming year, a plan to scale back spending in future years remains before the legislature.

Previous coverage:  State Offering Plan to Stave Off FY25 Transportation Cuts, A County Q&A on the Proposed Transportation Cuts

The House Appropriations Committee held a dedicated briefing on the local effects of the proposed cutbacks, including a step backward on Highway User Revenues – the share of state-levied taxes on motor fuels and vehicles, among other things, dedicated to local transportation needs.

That briefing is available online, with the first panel including MACo President and Baltimore County Executive John Olszewski, Jr., Baltimore Mayor Brandon Scott, and MACo Executive Director Michael Sanderson. The MACo panel begins roughly at the 31-minute mark (we’ve queued it up to the start of MACo’s panel in the video below):

As part of that presentation, Mr. Sanderson explained the deep cuts to Highway User Revenues that were made during the “great recession” in 2009 and were later embedded into the permanent formula distribution of state transportation funding.

A report from the Department of Legislative Services also highlights past year funding for highway user revenues, but it does so only starting in FY 2010, the year of the actual deep cuts. So, that picture — represents a gradual growth of local funds, with two “bumps” as the General Assembly made incremental adjustments to advance the restoration modestly.

However, a picture beginning with FY 2010 tells an… incomplete story. Here (at right) is an excerpt from another DLS report that shows the magnitude of these overall cuts from FY 2009’s initial funding to the eventual FY 2010 “over the cliff” effect:

• The FY 2009 allowance of $548.7 was in the budget approved during the 2008 session, based on the State’s forecast for transportation revenues in the year ahead, and with local governments receiving their statutory share of 30% of the account, as had been the case for decades
• The FY 2010 Actual reflects the mid-year reductions passed as part of the 2009 session’s Budget Reconciliation bill, reducing HUR distributions for the remainder of FY 2009 and then altering the formula temporarily for FY 2010 and FY 2011 — a fairly commonplace short-term fiscal accommodation during challenging budget cycles, and analogous to cuts made several years earlier
• The FY 2010 allowance was the amount proposed, through the altered formula, for FY 2010
• The FY 2011 Appropriation then reflects the drastic cuts made by the Board of Public Works in the summer of 2009, in the opening days of the new fiscal year – reducing the HUR funding to Baltimore City by nearly 40% (the largest of any jurisdiction, by far) and for all other counties and cities by 90% — this was the true “cliff effect” that first showed up in FY 2010
• The FY 2011 Allowance of $140.5 reflects the proposed budget before the General Assembly at that time (early in the 2010 session), guided by a Budget Reconciliation bill proposing to make these local transportation reductions permanent, effectively “re-basing” HUR funding at the starkly reduced levels arising from the fiscal crisis.

So…the historical view on Highway User Revenues deserves, at least, to include one year of pre-cut funding, for a fuller context. MACo assembled this picture from the DLS data in the report excerpted above, plus the FY 2010-2025 time series in the Department’s latest report on Aid to Local Governments, and the result is a meaningfully different story:

This graph is a fuller view of the history of Highway User Revenues. Its trend line would have been modestly upward to the high point of $548.7 million in the original FY 2009 budget… and then abruptly reduced and reset to far, far lower funding levels.

In Maryland, local governments have no authority to levy their own transportation revenues – counties and municipalities are fully dependent on this share of State transportation funding. In the years since the deep cuts of 2009, local governments have been left with broad and important responsibilities for roadway safety and maintenance but have been denied the resources needed to complete those tasks.

The $396 million in the currently proposed budget plan for FY 2025 remains far short of Maryland’s proper and historic funding levels, even on a simple dollar-to-dollar basis. Accounting for the cost of road maintenance and materials would expand this gap even farther. County leaders urge State policymakers to resist these deep cuts, and advance a sustainable solution to address these infrastructure needs across the full state.