The Maryland Department of Transportation (MDOT) has released its Draft Consolidated Transportation Program (CTP) for fiscal years 2026–2031, a $21.5 billion capital plan that outlines investments in highways, transit, aviation, and ports.
While the draft adds nearly $300 million compared to last year’s program, the headline for counties is far more sobering: Highway User Revenues are on track to plunge off a cliff, wiping out nearly $110 million in local road funding practically overnight.
Local governments maintain more than 80% of Maryland’s road miles but depend almost entirely on HUR to fund resurfacing, bridge repairs, and safety projects. Under current law, the county’s share of transportation revenues drops from roughly 20% to 15.6% in fiscal 2028, resulting in a nearly $110 million reduction in a single year.
Using a modest 2.5% inflation assumption, the cumulative shortfall for counties will reach about $520 million by fiscal 2031 — a permanent loss unless the General Assembly acts.
Overall Program Highlights
According to MDOT, the draft plan, funded with $10.9 billion from the Transportation Trust Fund, $8.3 billion in federal aid, and $2.2 billion from other sources, emphasizes system preservation, safety, and leveraging federal dollars. Highlights include:
- Highway corridors: US 15 in Frederick County and I-81 in Washington County.
- Transit reinvestment: Rehabilitation and modernization of the central light rail line.
- Port and aviation: A new tower at Martin State Airport and modernization at the Port of Baltimore’s Dundalk Marine Terminal.
- Federally leveraged projects: Advancing construction on I-97 in Anne Arundel County, MD 5 in St. Mary’s County, and MD 97 in Montgomery County, plus Chesapeake Bay island restoration.
The plan also maintains funding for Locally Operated Transit Systems (LOTS), which provide buses, equipment, and facilities that counties rely on to deliver essential transit service.
Highway User Revenues: The Cliff Ahead
Highway User Revenues are the primary State funding source for local roads and bridges. Established in 1968, HUR created a balanced partnership — sharing a portion of state transportation taxes with counties, municipalities, and Baltimore City.
For decades, local governments received as much as 30–40% of revenues, a recognition that they maintain the vast majority of Maryland’s road miles. That balance collapsed during the Great Recession, when the State slashed the local share to plug budget shortfalls.
While the State has since restored many recession-era cuts, HUR never recovered. Local governments now maintain more than 80% of Maryland’s roads but receive less than one-fifth of transportation revenues, leaving a widening gap between responsibility and resources.
The 2018 law converting HUR into capital grants introduced new instability, making the program more challenging to plan around. Now, the current statute drives another steep step-down: the local share shrinks from approximately 20% to 15.6% within the next few years, resulting in nearly $110 million in county road funding being wiped out in a single year.
The draft CTP reflects that reduction directly in its forecasts:
- FY26: $450.6 million
- FY27: $459.2 million
- FY28: $351.6 million
- FY29: $355.5 million
- FY30: $361.3 million
- FY31: $365.7 million
That’s a cut of nearly $110 million in a single year, with the lower baseline locked in permanently unless lawmakers intervene. Adjusting for modest inflation, counties stand to lose roughly $520 million statewide over the six-year program compared to a steady path.
Importantly, municipal distributions remain essentially flat under this plan, so the brunt of the loss falls on counties and Baltimore City. For them, this “HUR cliff” means fewer resurfacing projects, postponed bridge repairs, and escalating long-term costs.
Local leaders already face mounting fiscal pressures from school funding mandates and other State-driven obligations. A sudden and permanent drop in HUR would push road maintenance even further behind, driving up costs for both governments and drivers while undercutting safety and reliability on the roads residents use every day.
Locally Operated Transit Systems (LOTS)
The draft CTP maintains funding for Locally Operated Transit Systems (LOTS), which provide essential transit in rural and small urban jurisdictions across Maryland. LOTS grants cover buses, facilities, and equipment — often the only source of capital counties have to replace aging vehicles or sustain reliable service.
These locally managed systems range from fixed-route service in more urbanized areas to demand-response and rideshare-style programs in smaller or rural counties. For many communities, LOTS is the backbone of accessible, affordable transit — connecting residents to jobs, healthcare, and education.
While funding in the draft plan shows modest growth tied to program demand and inflation, counties continue to rely on these grants to meet their basic transit needs. Without stable LOTS support, jurisdictions would struggle to maintain service levels or modernize fleets, even as demand continues to rise.
Why It Matters for Counties
- Partnership: Counties are not asking for “extras” — they are asking for a fair, stable partnership to keep local infrastructure safe.
- Equity: The State has restored most recession-driven cuts in other service areas, but transportation remains out of balance.
- Efficiency: Early investment saves money. Deferred maintenance leads to higher costs in the future, both for taxpayers and for public safety.
- Community Impact: HUR is not just about roads — it affects school bus routes, public safety response times, and the daily lives of residents.
- Budget Pressure: With school mandates and other costs already straining local budgets, reductions to HUR would force tough tradeoffs at the county level.
- Transit needs: LOTS funding is one of the only tools counties have to sustain local transit operations, particularly in rural and small urban areas.
What Comes Next
The release of the draft plan kicks off MDOT’s annual fall tour, where State transportation officials will visit every county and Baltimore City to hear local priorities. MDOT will submit the Final CTP to the General Assembly in January 2026.
For counties, the message is clear: while new State revenues and federal matches support major projects, the statutory HUR cut leaves local road funding on an unsustainable trajectory. Without legislative action, counties will face significant and growing shortfalls in the years ahead, even as transit and infrastructure needs continue to rise.
MACo will aggressively advocate in the 2026 session to prevent the looming HUR cliff, secure the full restoration of Highway User Revenues, and ensure a fair and reliable state–local funding partnership.
At the same time, counties will continue pressing for stable LOTS support — since these grants remain the only capital resource many jurisdictions have to sustain local transit services — and for adequate funding to move forward with the road, bridge, and safety projects that residents depend on every day.
Stay tuned to Conduit Street for more information.
Useful Links
Maryland Department of Transportation — Draft FY 2026–2031 Consolidated Transportation Program
