Monday, March 23, 2009

Will House Democrats Follow Ehrlich’s Lead on Transportation? (Updated)

When former Governor Bob Ehrlich (R) diverted transportation money to the state’s operating budget, Democrats pounced. But now some of them are poised to do much the same thing.

Last week, the Baltimore Sun reported that a House Appropriations Subcommittee voted to cut highway user revenue distributions to the counties by $102 million a year for the next two years. The distributions would instead be redirected to the general fund as a buffer against deficits.

Highway user revenues (HUR) are composed of gas taxes, vehicle titling taxes, vehicle registration fees, short-term vehicle rental taxes and a small portion of corporate income taxes. Currently, 70% of HUR is dedicated to the state’s Transportation Trust Fund (TTF) and the remaining 30% is distributed to counties and municipalities. Baltimore City, which does not have state highways inside its borders, is guaranteed at least 11.5% of the local distribution. The remaining local distribution is divided among the jurisdictions according to a formula which relies on county shares of road miles and county shares of registered vehicles. Below is the planned distribution of HUR by county from the Governor’s original FY 2010 budget proposal:

HUR distributions are an important revenue source for the counties because they can directly control how that money is spent. They have no control over money spent by MDOT. HUR accounts for about a fifth of Montgomery County’s transportation budget and about a third of Prince George’s County’s transportation budget. Redirecting HUR away from the counties and towards the state’s general fund will slow transportation spending all around the state.

The General Assembly leadership will no doubt cite the state’s budget difficulties as a reason for the diversion. But when Governor Ehrlich did something similar, Democrats slammed him. In January 2003, Ehrlich proposed his first budget as the state emerged from a downturn. That budget included a $300 million transfer of planned transportation spending to the general fund. The state Democratic Party later said the TTF was “dangerously depleted” and claimed that Ehrlich “raided the transportation trust fund to the tune of $250 million but only put $165.5 million back by imposing a ‘car tax’ on all Marylanders.”

Montgomery County Executive Doug Duncan said this during his run for Governor:

The Ehrlich Administration has failed to provide the leadership needed to keeping our region and State moving forward, taking one step forward and two steps backwards with its raid on the State’s Transportation Trust Fund. The Fund took a financial hit that was never paid back and has left commuters sitting in even more traffic congestion.
Then-Mayor Martin O’Malley said this during the campaign:

Martin O’Malley will end the raiding of Maryland’s Transportation Trust Fund, ensuring that money meant for transportation will be used on our highest transportation priorities, instead of being diverted away. O’Malley will also ensure localities have the ability to make their own smart transportation investments.
O’Malley also made this claim on his website:

Ehrlich has raided $500 million from Maryland’s transportation trust fund. Other than supporting the ICC, Ehrlich has no vision or strategy for adding the roads and transit needed to serve new growth. He does not believe the state government should play a meaningful role in managing growth.
The Maryland Senate Caucus and Red Maryland are now climbing all over the Democrats’ about-face. And you know what?

They have a point.

Update: The Gazette reports that the full House Appropriations Committee passed these cuts, which will cost Montgomery County $11.2 million in transportation money.

Update 2: The Sun has a list of county transportation cuts passed by the House.