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Maryland Gov. O’Malley Wants $800 MM for Infrastructure

By June 9, 2011 July 8th, 2014 No Comments

Linking the quality of roads, bridges and rail to his state’s global competitiveness, Maryland Governor Martin O’Malley has told business leaders that the state needs to find a way to raise $800 million addition dollars to invest in infrastructure.

The Democratic governor’s remarks were made in early May before the Maryland Chamber of Commerce. His comments regarding this increased investment in infrastructure were within a list of what he called the “five hard truths” about the economic future of Maryland. The other four points were that the funding would need to come from a diversity of sources, beyond the current per-gallon gas tax; that the state’s two largest urban centers, Baltimore and Washington DC, have not kept up in transit capacity with population increases since the 1980s; that two very large projects (the Intercounty Connector and Interstate-95 upgrades) were stressing state borrowing capacity; and that the economic recession has reduced funding for transportation plans by $2 billion.

According to the governor, “Other nations, like China, are investing about ten percent of their gross domestic product in infrastructure. India is investing about five percent of its GDP, and in Europe they’re investing 7 or 8 percent. Nationally, in America, it’s two percent.”

State pundits have come out for and against these plans, in particular how the additional funds will be raised. What the governor and the state have going for them is that the Pew Research Center lists Maryland among a handful of states that monitor and analyze their transportation/infrastructure expenditures effectively.

Are you kidding me? Stop this crazy thing

In HometownAnnapolis.com, opinion writer Michael Collins pulls no punches. He vehemently disagrees with the implications of what O’Malley is proposing, suggesting this is just a ploy to increase revenues to fund other, non-transportation programs.

Collins says “two gigantic pots of money under control of Maryland’s Transportation Secretary…the Transportation Trust Fund and the Maryland Transportation Authority” are “filled by various fees and taxes while the authority’s coffers are filled by toll money and an $18 annual fee for E-ZPass.” Further revenues come from government bond issues, he notes, compel the state to keep up Maryland’s bond rating from Standard & Poor’s. “A higher bond rating means a lower cost of borrowing,” says Collins. “And they want to borrow and spend.”

Collins further details the increases the state has levied in transportation related fees including titling, registration and vehicle registration fees, corporate and sales taxes and the state’s 23.5 percent gas tax (over and above the federal 18.4 percent tax). He decries the rate increase on state gas taxes, to 33.5 percent, a 42 percent increase.

All this is because, says Collins, “the governor and legislature treat the trust fund like a piggy bank, taking the money and leaving IOUs. They took $100 million this year from the ‘trust’ fund – nearly $700 since 2007 – to increase spending on priorities like in-state tuition for illegal immigrants, the governor’s overseas junkets, etc.”

It should be noted that this discussion comes at a time when the national gas tax is under scrutiny. Increasing vehicle fuel efficiency renders the system a poor measure of who is using the roads and portend a decline in revenues as more vehicles cut their gas use.

Yes, it should happen

Another writer and opinion columnist takes a more positive view of the governor’s proposal. Richard Parsons, an opinion writer on the Potomac Patch, thinks the governor is “getting down to business, with an increased focus on restoring the state’s battered economy. Given the continued weakness in the housing, employment and stock markets, his timing could not be better.”

Parsons says O’Malley “made a compelling case for kick-starting new investment in infrastructure, noting that the United States is falling far behind our global competitors in infrastructure investment and signaling his willingness to get behind increased funding for transportation projects across the state.”  This is “exactly what the doctor ordered,” says Parsons.

Ron Snyder at the Essex-MiddleRiver Patch detailed the revenue enhancements being proposed, which include:

  • Bay Bridge tolls double from $2.50 to $5.00 this year, and increase up to $8 by July 2013.
  • One-way toll on the Fort McHenry Tunnel, Harbot Tunnel and Key bridges would increase from $2 to $3 this October, with another increase (to $4) in 2013.
  • Increase for $5 to $6 on the John F. Kennedy Highway and Hatem Memorial Bridge
  • Harry W. Nice Bridge toll increases from $5 to $6 in 2011, on up to $8 in 2013.

Back in February, the Maryland Transportation Authority Secretary Beverley Swaim-Staley spoke about the need for increasing tolls around the state.

“There are two key forces driving this proposal: paying for major construction work needed to keep these large, aging and expensive facilities both safe and operational and paying for additional highway capacity now under construction in the Baltimore and Washington regions,” she said in a statement.  “The bottom line is that the MDTA’s tunnels, bridges and turnpikes are financially supported through tolls and not the state’s Transportation Trust Fund or General Fund.

Objective observations from Pew, AASHTO

Maryland road conditions lag its neighbors, but the state at least uses smart management tools to identify where to make improvements.

Close to half – 44 percent – of all Maryland roads (interstates, freeways and major urban routes) are judged to be in poor or mediocre condition, according to a 2009 analysis by the American Association of State Highway and Transportation Officials (AASHTO) and Federal Highway Administration data. This compares to just 27 percent in neighboring Delaware and 23 percent in Virginia. AASHTO also finds that Maryland motorists incur additional operating costs of $425 each year due to rough roads, which is approximately the national average.

The state received $431 million in the 2009 federal economic stimulus program, offsetting by about a third a previous cut the state made of $1.3 billion from its highway capital program (in other words, the state still is shortchanging maintenance by about $900 million).

Separately, the Pew Center on the States has lauded Maryland for conducting quantitative analysis of how it invests its money in transportation. “Just 13 states…[including] Maryland…have goals, performance measures and data needed to help decision makers ensure their surface transportation systems are advancing economic growth, mobility, access and other key policy outcomes.”