And as always, JUTP is looking for guest posts. If you've got something to say, feel free to e-mail me at justupthepike at gmail dot com.
If you’ve been outside of your home in the last decade you know that our roads, buses and trains are at their breaking point. Whether it’s sitting in traffic on the beltway (DC or Baltimore, both work for our purposes) or watching a full Metro train pass you by, you know something needs to be done. This may come as a shock but the ICC hasn’t solved all of our transportation problems. Maybe it’s time to actually have an adult conversation and get serious before something crumbles and people die.
Let’s discuss the wonderful world of Maryland transportation. Maryland pays for transportation projects in a variety of ways. Sometimes we use bonds. The Maryland Transportation Authority sells bonds and uses GARVEE bonds (look it up). Sometimes we pay cash. The Maryland General Fund or Transportation Trust Fund (TTF) are huge sources of money. And if Uncle Sam is feeling generous, the federal treasury helps foot the bill too. It doesn’t hurt that Marylanders send 18.4 cents per gallon of gas straight down 16th Street to the Treasury Department.
I’d like to focus on the Transportation Trust Fund for the time being because size matters and the TTF is the biggest source of revenue.
What is the Transportation Trust Fund? It is a “dedicated” fund started in 1971 that finances the Maryland Department of Transportation (MDOT). The TTF gets its money from the gas tax, excise taxes, motor vehicle fees (registrations, licenses and other fees), federal aid, corporate income taxes, operating revenues (e.g., transit fares, port fees, airport fees), and bond proceeds. MDOT uses the money to maintain and operate roads, bridges, trains, airports, sea ports, and buses. Pretty straightforward.
So why does the TTF need additional revenues? Easy. Two main reasons: 1) the fund’s primary source of revenue, the gas tax, is the same as it was in 1992, 23.5 cents, and 2) since 2003, the state stopped giving counties and localities their portion of the funds and paid other bills with the money instead. Reason 2 has been characterized as transfers, reallocations, adjustments, raiding or even stealing. At the end of the day, our government took about $1 billion it was supposed to spend on roads, bridges and trains, and spent it on other stuff. Oops.
Fast forward to right now and we’ve got more people to move around and less trains, buses and roads to do it. Oh, and our bank account is running pretty low. Enter the gas tax. Last fiscal year the gas tax brought in $746 million. Governor O’Malley proposed the proposal of the Blue Ribbon Commission on Maryland Transportation Funding that nets the most amount of money which would be to apply the 6% sales tax to the retail price of fuel. That brings us about $600 million. It’ll cost someone who drives a lot about $150 per year and will probably save them more than that in wear and tear. It pays all the back money we owe to the counties and Baltimore City in a year and a half and gives us the spending power to not only make sure bridges don’t collapse, but construct a modern transportation system.
It is big, it is bold, it is decisive, it could bring Maryland back into the game with the proverbial “one swing of the bat.” You should absolutely not support it . . . yet.
Imagine walking into a restaurant and the host asks you to pay $25 per person. The catch is that there is no guarantee that you’ll be seated, get food or be allowed to stay. That’s what Governor O’Malley is asking you with the gas tax. He is asking you to pay more but not assuring you that the money will go directly towards transportation projects or would ever be spent on infrastructure. The Blue Ribbon Commission nailed it on the head in their first recommendation to restore trust to the Trust Fund: enact laws that prevent money from being taken out of the TTF for non-transportation reasons ever again.
If he can guarantee that, let’s go back to the restaurant analogy and ask to see the menu. Can we have the Purple Line and Rapid Transit Vehicles in Montgomery County, Red Line in Baltimore, Corridor Cities Transitway to Frederick, smarter traffic lights, bike lanes, and an easier trip to Ocean City for dessert? After a meal like that, I would be ready to pay the bill.
We should make our Governor make the case of why we need to pay more at the pump. Marylanders need to know what transit projects are going to be engineered and built, which roads will be paved, and where train tracks are going to be laid. We’re being asked to take money from our bank account and put it in Maryland’s bank account and that’s OK. I just want to make sure that my money and your money will result in all of us spending less time getting to and from work and more time with our families or if you don’t like your family, somewhere else you enjoy being.
When our Governor speaks up and tells us why we need to pay more, what we’ll specifically be paying for and how much it will cost us, then we should support him because by supporting his plan, we’ll really be helping ourselves.
What you are asking for, limiting the governor's ability to use the TTF for general use, is already in O'Malley's proposal. To take money for general use from the TTF would require a 60% approval vote by the House and Senate and, also, require a request by the State Treasurer for the transfer.
Maybe not a foolproof way to prtect the fund, but, maybe, not wise to completely close the ability to tap that revenue for general use.
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