On the latest episode of the Conduit Street Podcast, Michael Sanderson and Dominic Butchko discuss transportation funding and the significance of the Maryland Commission on Transportation Revenue and Infrastructure Needs, which is charged with recommending improvements to existing transportation revenues, investment decisions, and more.
For decades, the State supported a balanced means to maintain its transportation infrastructure. The bulk of transportation revenues – mainly motor fuel and vehicle titling taxes – have been split between the State (for its consolidated Transportation Trust Fund, serving multiple modes) and local governments (who own and maintain roughly 5 of every six road miles across the state). For decades, this split served all parties effectively.
The State faced a mid-year budget crisis during the Great Recession in 2009. As a result, the Board of Public Works adopted a 90% reduction of the local distributions of these Highway User Revenues and a roughly 40% reduction to Baltimore City’s allocation (the largest by far to any jurisdiction). Since then, recession-driven cutbacks in many service areas have been fully or largely restored. This is not the case with Highway User Revenues – they remain far behind historic levels, even after the State has enacted a substantial transportation revenue increase.
Unfortunately, the Great Recession HUR cuts, coupled with new obligations toward school funding, leave little room for additional investment in roads, not to mention counties are preparing for an uncertain economic future and talk of recession.
In addition, the push toward electric vehicles will likely exacerbate the issue. Cars and trucks use less gas or run on electricity, shrinking funds for roads and bridges. But electric vehicles still contribute to road wear and tear, so states and local governments need money to maintain them.
State policymakers are considering other ways to pay for Maryland’s transportation infrastructure. One growing policy trend is applying a separate registration fee for hybrid or electric vehicles.
However, special registration fees are not the only mechanism to lower gas tax revenue and promote equity among drivers. After exploring several options, such as a tire tax, a battery tax, and expanding gas taxes and registration fees, Oregon settled on a per-mile charge as the fairest and most accurate way to pay for state roads and bridges.
An interim commission report is due to the Governor and legislature on or before January 1, 2024, with a final report on or before January 1, 2025. Dates, times, agendas, updates, and other information will be posted on the commission website at www.mdot.maryland.gov/commission.
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