Donald Fry: Maybe it’s time to change Maryland’s transportation funding model

By Donald C. Fry

There are few topics that consistently divide rural Marylanders from urban residents in the state than the issue of who should pay for mass transit. And the venue where these divisions have habitually bubbled to the surface over the years is – you guessed it – the Maryland General Assembly.

In 1971, Maryland lawmakers created the Transportation Trust Fund to support the state’s new Department of Transportation by establishing an integrated, substantial and flexible fiscal resource dedicated to funding the state’s breadth of highways, transit, port, and airport facilities.

In the 1970s, if you wanted to rile up a lawmaker from Western Maryland, Southern Maryland, Eastern Shore, or smaller non-metropolitan counties, you could simply mention Maryland’s funding share of the then-new Washington D.C. Metro rapid transit system.

Then you could stand back and get ready for a good tirade. After articulating in passionate detail the perceived unfairness to non-metropolitan area taxpayers, the lawmaker would end with the inevitable question being asked by constituents: “Why should we pay for a hugely expensive mass transit system that we will never use?”

Subsequently, with the expanded need and growth of mass transit in the Baltimore area, similar arguments advanced.

As a means of restricting the expansion of mass transit, for years the State of Maryland required that 50 percent of transit operating costs be paid through the fares collected by the riders, the highest such requirement in the country.

Three decades later, that divide still lingers in the State House. I recently testified in both the House of Delegates and Senate of Maryland in support of proposed legislation that would raise the gas tax by 10 cents and create a “lockbox” to ensure that transportation funds be used solely for transportation purposes. One of the most frequently-asked questions by those opposed to the gas tax increase is: “Why should we pay for a hugely expensive mass transit system that we will never use?”

This perspective is reflected in a bill filed by Eastern Shore Senator E. J. Pipkin, SB 729, that proposes to create two new transit authorities to finance, build and operate the Red Line and the Purple Line projects planned for the Baltimore region and the Washington, D.C. suburbs respectively.

Under the bill, the two authorities would exercise “exclusive jurisdiction” over their separate projects and would have the power, within their jurisdictions, to tax and to issue revenue bonds and other financial notes, without General Assembly approval, to pay for the cost of these projects. Clearly, Senator Pipkin’s legislation is intended to insulate rural counties from having to pay for either of the two new light rail transit systems planned for the Baltimore area and DC’s Maryland suburban counties.

As a business and transportation advocate, I am comfortable with the argument that improving transit service and strengthening mobility in Maryland’s two major business and employment centers inherently benefits the business climate in all of our state’s jurisdictions, both urban and rural.

However, given the current depleted state of transportation funding in Maryland, and the increased costs of highway and transit projects, the idea of a regional transit authority may be worth considering and possibly even expanding.

As a statewide body, lawmakers have essentially put on hold, for almost two decades, any substantial strengthening of revenue to the state’s Transportation Trust Fund. The last time lawmakers could agree on raising the per-gallon gasoline tax rate – the transportation fund’s primary source of revenue which, by the way, is not inflation sensitive – was in 1992.

Even with vehicle fee increases and other limited revenue enhancements lawmakers have managed to enact since then, revenue to the fund has not come close to keeping up with either inflation or infrastructure construction costs. For instance, during the last decade, the transportation fund’s revenue grew at less than half the rate of growth experienced by the state’s general operating fund.

As a result, Maryland now has a more than $40 billion backlog of highway, transit, port and airport projects that are planned but not funded for construction.

The existing statewide transportation funding system is clearly not providing adequately for Maryland’s infrastructure and advocates for significantly strengthening it face a challenging uphill struggle in Annapolis.

Perhaps it’s time to break the chronic funding stalemate that is stifling our mobility in Maryland by seriously examining the option of creating a Baltimore-Washington transit authority with its own revenue-raising capabilities and operating responsibilities for Maryland’s most populous core region.

Such an authority could not (and should not) be expected to provide the exclusive funding for transit needs but it could certainly supplement money provided by federal and state sources thereby relieving some of the burden on the state’s Transportation Trust Fund.

Currently there are more than three dozen major transit authorities in metropolitan areas and regions around the U.S., including many comparable to the Baltimore-Washington corridor.

The Greater Baltimore Committee studied the funding and operations of transit authorities in nine such regions – Pittsburgh, Atlanta, Minneapolis, Cleveland, Seattle, Portland, Denver, Chicago and Dallas. All but three authorities studied relied on some version of local sales tax as their primary source of funding. Two were primarily funded by appropriations from their state’s legislature. A local payroll tax was the biggest funding source for one region. In addition to fare box revenue, other secondary funding sources included taxes on rental cars and auto sales, as well as county, state and federal grants and, in one case, a small portion of local lottery revenue.

The point is, across the nation many ways have been found to fund, build and to operate transit systems that are vital to the economies and quality of life in the regions that they serve.

Transit is the focus of most regional authorities, and mass transit is a key issue in Maryland. But in light of the General Assembly’s inability to achieve a statewide consensus on how to generate adequate revenue for transportation infrastructure in general, a regional model might also work well for all transportation projects, not just transit.

Maryland’s current crisis in funding transportation needs at both the state and local levels makes it increasingly likely that solving the crisis will rely, to some extent, on a funding formula that includes localize partnerships involving counties and regions as well as the state and the federal government.

It may be time for our state to consider a regionally-driven fiscal authority as an additional stakeholder in the transportation funding solution.

Comments are closed.