Maryland running out of transportation money, state analysts warn

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Photo - Traffic in Bethesda (Examiner file photo)
Traffic in Bethesda (Examiner file photo)
Local,Maryland,Rachel Baye

ANNAPOLIS -- Maryland has no money to build new transportation projects and in five years won't have enough money to maintain its roads and transit, the state's top budget analyst told lawmakers Tuesday afternoon.

The state's transportation trust fund will have roughly $4 billion to spend between now and 2018, according to the General Assembly's Office of Policy Analysis.

"The outlook and the situation for the trust fund are quite grave," Warren Deschenaux, the office's director, warned lawmakers before presenting the data.

Alternative ways to pay for transit
• Enter a public-private partnership, a long-term agreement with a private company to design, build, finance, operate and maintain the transit line through annual payments to the private contractor.
• Get a Transportation Infrastructure Finance and Innovation Act, or TIFIA, a low-interest federal loan and credit assistance program for transportation projects. This was used to finance the Intercounty Connector.
• Create a special taxing district that takes advantage of increases in property value that result from the new transit system to pay for that transit system. The revenue from the tax would be used to support borrowing.
• Authorize local governments to pass their own sales or gas taxes.
• Use general fund revenue or local bonds to pay for transit.

Estimates by the Maryland Department of Transportation are about $2 billion more optimistic, estimating the state would have nearly $6 billion to spend on transportation in the same period.

The difference stems from more "robust" predictions of how much revenue will come from fees, such as the state's titling tax, and smaller predictions for how much the state will need to spend, said budget analyst Jon Martin.

But even if the Transportation Department's assumptions are right, the state still will be running out of money by 2018, when roughly 80 percent of the funds for transit and 100 percent of the State Highway Administration's funds will be spent on maintaining existing infrastructure.

"By the time you get to 2018, you're really not planning that much for future projects to come online because you have no money basically to build those projects," Martin said.

The estimates do not account for the $1.9 billion planned Purple Line light rail in Montgomery and Prince George's counties, the $828 million Corridor Cities Transitway rapid bus system planned for the I-270 corridor or Baltimore's $2.1 billion Red Line subway project. Though these projects are in line for federal funding, the state probably would have to fork over $725 million in new revenue in fiscal 2018 to build all three at once, the analysis shows. That's the equivalent of more than doubling the state's current 23.5-cent gasoline tax.

To pay for the transit projects, Deschenaux's office pointed to a list of alternatives to a new statewide tax, like a federal loan, a public-private partnership or a local sales tax.

Replenishing the money in the transportation trust fund has been a point of contention. Gov. Martin O'Malley backed a 6 percent sales tax on gasoline in the spring's legislative session, though it ultimately failed.

Though House Speaker Michael Busch "recognizes that there's a need for investment in the state's transportation trust fund," he hasn't decided the best way to fill that need, said Alex Hughes, Busch's senior legislative counsel.

In Montgomery County, infamous for its overcrowded roads, officials are calling for the state to give the county the authority to levy its own sales or gas tax to pay for transit projects.

Given that new cars get better mileage, a gas tax might not make sense, said state Sen. David Brinkley, R-Frederick and Carroll counties. Still, he said, something needs to be done.

"We've come to the end of the rope," he said. "All we do is we keep kicking it down the road."

rbaye@washingtonexaminer.com

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