Maryland on the Verge of a Fix for Transportation Funding Woes

Maryland is one of a growing number of U.S. states that’s found itself in a tough spot when it comes to transportation funding.

Transit advocates in Maryland have rallied around Governor Martin O'Malley's plan to increase revenues. Image: Transportation for America

The state blew through its transportation funds when it built a big highway project called the Intercounty Connector. Now, the state has so little money left that unless something changes, it won’t be able to build long-sought transit projects.

Stephen Lee Davis at Transportation for America says transit advocates, state lawmakers, and Governor Martin O’Malley have coalesced around a plan to fund transit expansions.

First, the damage from the ICC:

The state spent $265 million in general funds and though the $180 million from the state’s Transportation Trust Fund represents only about 10 percent of what the state gas tax and vehicle fees bring in each year, Maryland is also devoting $750 million in future federal funds they haven’t yet received to the project — or almost 130 percent of what the state receives from the feds each year for all of their state highway needs. ($580 million in FY12.)

State and independent analysts have been saying that by 2018, Maryland will only have enough money to cover maintenance and repair, making it nearly impossible to fund any new highway projects or any of the long-awaited and much needed public transportation projects, including the new Red Line subway in Baltimore, the Purple Line rail link for Metro and the innovative Corridor Cities Transitway rapid bus line in the DC region.

Now, the solution:

The plan would:

  • Index the gas tax to inflation starting immediately (with a ceiling of 5 cents maximum increase in any given year.)
  • Add a three percent sales tax at the gasoline pump, phasing that in over a period of three years starting this summer.
  • There are other provisions that could change the sales tax rate on gasoline that have to do with internet sales tax. In short, if Congress allows states to tax internet sales, Maryland will devote that revenue to transportation. If not, they’ll raise the sales tax on gas to five percent.
  • Raise $4.4 billion for transportation over six years (including the ability to borrow against increased future revenues.)

The Maryland House of Representatives has approved the plan. Now it is up to the State Senate to fix this problem, or punt.

Elsewhere on the Network today: Greater Greater Washington compares the residential density of the country’s largest metros. Seattle Bike Blog reports that the city’s efforts to encourage family cycling are paying off. And the Tri-State Transportation Campaign says that a provision of the new transportation bill, MAP-21, could open up a new stream of transit funding for Connecticut.