The Washington Examiner reports that MTA says that cost estimates for the Purple Line have risen 28% since the plan got past the phase of consideration by the public:
It also now has a $1.925 billion price tag, up from $1.5 billion estimates made two years ago.
MTA Executive Director of Transit Development and Delivery Henry blamed the increase on the complexity of the New Starts process and the State's lack of familiarity with it:
The project is delayed because the application for federal funding has been more time-consuming than expected, said Henry Kay, MTA's executive director of transit development and delivery. He said the state hasn't applied for such federal New Starts funding in a long time.
"It got a lot more complicated while we were out of the room," Kay said.
That, in turn, has caused the costs to rise, he said.
They plan to makeup some of the gap by taking funds away from another public transit option: MARC.
State officials are still trying to line up funding for the project -- the federal funding is not guaranteed -- but they said they plan to use $135 million that was previously set aside for MARC commuter trains to pay for a portion of the Purple Line instead.
Meanwhile, projected ridership of the new line has declined:
Ridership was projected to be about 62,500 riders per day.
Now ridership is expected to be slightly lower at 60,000.
No reportage on the impact on Montgomery County's share of the cost, or the impact of these changes on the battle for vital federal funds.
Lost in all the coverage of Maryland’s projected $1.6 billion general fund deficit is another conclusion drawn by state budget analysts: the Maryland Department of Transportation (MDOT) “may not be able to deliver its planned capital program.” A capital budget is an exercise in balancing. On one side, available revenues – usually from taxes, transfers and bonds – must be calculated on an annual basis for a number of years. Maryland uses a six-year budget. On the other side, a list of projects must be entered that cost no more than the revenues to be realized. But since most of these projects are likely to be multi-year, they have to be inserted in such a way that each year is roughly balanced between spending and revenue. If the budget gets out of balance – usually through a shortfall of revenue – then projects have to be delayed and/or cancelled. That’s exactly what happened in 2008, when deteriorating revenues caused by the recession caused MDOT to “defer” $1.1 billion in capital projects.
In the same Spending Affordability Briefing that projected a $1.6 billion general fund deficit, the General Assembly’s Department of Legislative Services (DLS) predicted that would happen again. The Transportation Trust Fund (TTF) receives revenues from taxes and fees (like the gas tax, the titling tax and license fees), operating income (like rail and bus fares and airport revenue) and bond sales. Out of those revenues, it must pay for debt service on bonds, operating expenses (like MARC, the airports and snow removal) and capital spending. Since items like debt service, airport operations and snow removal are pretty much mandatory, that means revenue shortfalls will fall disproportionately onto the capital budget. DLS believes MDOT has been optimistic about projecting the amount of money that will be left over for capital spending for three primary reasons:
Less Tax Revenues DLS states that MDOT has overestimated the amounts the TTF can collect from titling taxes, gas taxes, sales taxes and corporate income taxes, all of which are revenue sources for transportation. MDOT projects that titling tax revenues will increase by 7.6% per year over the next six years. DLS projects an annual 6.8% increase. That disagreement alone produces a $405 million shortfall. DLS believes the combined shortfall in tax revenues for the TTF will be $619 million over six years.
Higher Operating Budget Growth MDOT projects that its operating budget – which, like its capital budget, depends on TTF revenues – will grow by 4.0% annually over the next six years. DLS notes that the ten-year historic rate of MDOT’s operating budget has been 5.4%. DLS estimates a 5.3% operating budget growth rate over the next six years and that siphons off $395 million that would otherwise go to capital projects.
The State is at its Debt Limit Maryland has almost run out of bonding capacity. That has been caused by gigantic increases in allowable debt. General obligation bonds outstanding have risen from $3.3 billion in FY 2000 to a projected $8.6 billion in FY 2016 – an increase of 157%. Transportation bonds outstanding have risen from $725 million in FY 2000 to a projected $2.4 billion in FY 2016 – an increase of 238%.
State policy defines its debt limit in two ways. First, the outstanding tax-supported debt should not exceed 4% of state personal income. That ratio is projected to be 3.50% in FY 2013. Second, debt service should not exceed 8% of state revenues. That ratio is 6.87% in FY 2011 and is projected to hit 7.89% in FY 2016. If the state exceeds these levels, it may endanger its AAA bond rating.
This is going to have a direct impact on the TTF. DLS says, “Due to less revenue and higher levels of operating budget spending, bond sales are constrained throughout the six-year period.” The projected loss for the TTF: $1.39 billion.
Here is a graphic comparison of the difference between the MDOT forecast and two DLS forecasts of transportation spending over the next six years. The line at the top represents MDOT’s forecast. The two bars are forecasts from DLS, with the more optimistic forecast showing what would happen if MDOT loosened its bond coverage standards. In the out years, the shortfalls run into the hundreds of millions of dollars annually.
What happens to capital spending if DLS is right? DLS estimates that slow increases in revenues, rising debt service payments and rising MDOT operating costs will squeeze out the money available for transportation projects. In FY 2010, the state spent $1.4 billion on transportation projects, of which $794 million came from the federal government. In FY 2016, DLS projects that the state will spend just $748 million on transportation projects, of which $388 million will come from the feds. The state’s own spending on transportation will shrink from $575 million in FY 2010 to $360 million in FY 2016.
So what does this all mean?
No New Projects As of 2008, MDOT could barely keep up with system preservation. If it has to make another round of project cuts, it may not be able to afford any new projects at all. As it is, MDOT’s Consolidated Transportation Program is packed with projects that are funded for planning but not construction. How large can that backlog grow?
Trouble Funding New Transit DLS said in its evaluation of MDOT’s budget, “MDOT’s current forecast does not account for the operating or capital impact of large capital projects such as the three different transit lines under consideration.” Translation: the state cannot afford its share of the Red Line, the Purple Line or the CCT. The state government would owe about $800 million each for the Red Line and the Purple Line and between $225 million and $400 million for the CCT. In FY 2016, DLS projects that the state will be spending $360 million of its own money for its entire transportation budget with little or no extra bonding capacity.
So how does the state propose to deal with this problem? No one is saying, but Governor O’Malley and the General Assembly’s presiding officers are united in opposing any revenue increases. If they are serious, that fact combined with the evaporation of federal stimulus funding will pressure the state to divert transportation money to the general fund.
Today, Maryland Democrats are celebrating the reelection of Governor Martin O’Malley, U.S. Senator Barbara Mikulski and their holding onto both chambers of the General Assembly. But the reality of governance will soon set in. Why?
Because the Republicans have won control of the U.S. House of Representatives, and that means federal stimulus aid for the state government has almost certainly dried up. Maryland’s state government has been subsidized by federal stimulus money under ARRA (the American Recovery and Reinvestment Act of 2009) for three fiscal years: 2009, 2010 and 2011. According to the state’s latest Spending Affordability Committee report, the state government has received $4.4 billion of stimulus funding over the last three fiscal years. The largest subsidies have been directed to Medicaid ($1.6 billion), education ($1.1 billion) and infrastructure ($781 million).
The stimulus funds have been invaluable for closing Maryland’s general fund deficits. In FY 2009, 2010 and 2011, the state racked up $6.4 billion in structural general fund deficits. It has used $2.9 billion of federal stimulus money to help close those deficits. That means federal money has been used to plug almost half of Maryland’s budget gaps.
With the election of a Republican U.S. Congress, that money is gone. And Maryland faces a general fund deficit in FY 2012 that could be as high as $1.6 billion. That leaves a number of unappetizing options to deal with it.
Budget Cuts
In FY 2011, 41% of all state general fund spending was sent as aid to local governments. By spending category (which overlaps local aid), 50% of the general fund goes to education, 24% goes to health care and 9% goes to public safety. Those three items combined account for 84% of the general fund in FY 2011. It’s probably impossible to have meaningful long-term spending cuts without touching one or more of these areas.
Teacher Pensions
In the 2010 session, the Senate passed a plan to phase in a partial handoff of teacher pension obligations to the counties. The plan would have saved the state no money in FY 2011, $63 million in FY 2012, $194 million in FY 2013 and more than $300 million annually in the out years. Those out year revenues are significant, but the state’s budget problems may necessitate collection of them earlier. So the General Assembly could well choose to accelerate the phase-in and make the counties assume a greater share of the cost than in the Senate’s plan.
Diversion of Transportation Revenues
The Transportation Trust Fund (TTF) claims over $800 million a year in state funding. The TTF’s revenues include vehicle titling fees (20%), gas taxes (19%), registration fees (15%), operating revenues (10%), sales taxes (6%), corporate income taxes (4%) and more. All are ripe for diversion to the general fund. The General Assembly has already seized transportation money due to the counties so state transportation money could be next. That would be a disaster for the state’s infrastructure, but if transportation advocates are pitted against education advocates, who do you think will win?
Tax Hikes
The three most discussed taxes are an extension of the millionaire tax (which was supposed to last for three years), the imposition of combined reporting to capture more corporate income taxes and an extension of the sales tax to services. The first two options will be resisted by the business community and both have very uncertain revenue generating capabilities. The last time the state tried to extend the sales tax to services, the result was the much-hated computer tax (which was repealed in 2008).
Casting a long shadow over the taxation debate is the state’s competitive position with its neighbors – especially Virginia. The Tax Foundation’s FY 2011 tax competitiveness report ranks Delaware #8, Virginia #12, Pennsylvania #26, West Virginia #37 and Maryland #44 of the fifty states. Here is how Maryland compares to Virginia on a few tax measures.
Corporate Income Tax Maryland: 8.25% Virginia: 6.00%
Top Income Tax Rate Maryland: 6.25% (at $1 million income) Virginia: 5.75% (at $17,000 income)
Sales Tax Maryland: 6% Virginia: 5%
Maximum Unemployment Insurance Tax Rate Maryland: 13.5% Virginia: 6.2%
At least the state will not have to pay for Bob Ehrlich’s proposed $700 million sales tax cut.
Recently, the Gazette noted how Republican Gubernatorial candidate Bob Ehrlich’s positions were “risking Montgomery County votes.” House Majority Leader Kumar Barve remarked, “I think [Ehrlich has] given up on Montgomery County… I think he’s looked at the numbers, and from a political standpoint giving up on Montgomery County is probably a smart move for him.”
The article understates its point. Ehrlich’s positions are not just unattractive to county residents. In fact, when combined as a whole, they constitute the most blatantly anti-MoCo platform of any statewide candidate in recent memory. Consider the following items in Ehrlich’s platform.
The Purple Line and Transportation
Ehrlich repeated his long-standing support for bus rapid transit instead of light rail for the Purple Line in May. That support is connected to his alliance with the Columbia Country Club, which opposes the Purple Line because it would cut through its golf course.
Let’s consider the facts in evaluating Ehrlich’s opposition to light rail. In January 2009, we examined the state’s Draft Environmental Impact Statement and found the following:
1. Most light rail options are faster than the bus options.
2. Light rail carries more people per day.
3. Light rail costs more than buses, but relative to users, the cost effectiveness differences are not as large. The most cost effective bus option is the one Ehrlich resists: running buses in county-owned right-of-way through the golf course. That exposes Ehrlich’s support for buses as not being connected to public welfare, but rather to the welfare of the country club. As Ehrlich’s former Secretary of Transportation said in 2003, “The governor happens to love golf.”
So why does Ehrlich say he opposes rail? He told the Post, “You have to be honest with people, and the honesty is the dollars aren’t there.” Why is it that the dollars were there for the ICC, which was started on Ehrlich’s watch, but they are not there for the Purple Line?
To his credit, Governor Martin O’Malley pushed the General Assembly to index the gas tax in 2007. They chose to raise the titling tax and devote part of the sales tax increase to transportation instead, which yielded little new funding for transportation. O’Malley continues to favor indexing the gas tax, an approach that will raise more money when gas prices inevitably go up. Ehrlich has no ideas for new revenue and his sales tax cut would cost the Transportation Trust Fund $48 million per year, a number he calls “manageable.” By cutting transportation money and then saying we cannot afford worthy transportation projects, Ehrlich is creating a self-fulfilling prophecy that will doom MoCo to endless congestion.
We have expressed considerable frustration with the Lords of Annapolis for not adequately funding transportation in the past. But there is a big difference between O’Malley and Ehrlich on this issue. O’Malley has tried to increase transportation funding and has set high goals for both the Red Line and the Purple Line. He also has a record of protecting transit funding of all kinds. Ehrlich has thrown up his hands and openly tells us we deserve less. Such a position demonstrates that he does not understand our transportation problems and, in fact, does not care. On this issue, Ehrlich is the anti-MoCo candidate.
Following is a policy piece on transit released by council at-large candidate Hans Riemer's campaign. #####
Hans Riemer has focused his community involvement on supporting public transportation in Montgomery County. As vice-president of the Action Committee for Transit, Hans has fought to protect Metro funding, RideOn buses, and to build the Purple Line and Corridor Cities Transitway.
Hans will continue his leadership on public transportation as an At-large member of the County Council. His vision for a better future for Montgomery County is tied to improved transit options for residents. The key priorities that Hans will work on include:
1. Ensuring Metro is world class: Metro is the backbone of our economy in Montgomery County, and as it deteriorates, so does our quality of life. We must bring it back.
2. Light-rail Purple Line: I will be a leader for the Purple Line in state and federal funding processes.
3. The Corridor City Transitway: If the Federal money isn’t there, let’s find an affordable approach to get going now with this key project in the 270 corridor.
4. RideOn buses: Without RideOn, countless people will not be able to get to their jobs, schools, and families.
5. Rapid transit vehicle routes on our commuting corridors: Starting on Route 29 with feeder systems to support new jobs in the East County.
6. Priority for walkers and bikers, too: If it is easier to get into our job centers people will walk or bike.
These systems will all work together to provide real alternatives to driving for all our residents.
An inability to secure funding for transportation projects has stalled our efforts to plan sustainably by creating affordable housing and new jobs centered around mass transit. We need a Council that will fight tenaciously to get the Purple Line through the state and federal funding processes. The Purple Line was first proposed in the late 1980s, while the CCT was first proposed in the early 1970s---more than 35 years ago! How long do we really plan to wait? It is time for the County to take responsibility for getting the CCT built.
That will mean looking at financing mechanisms that don’t require waiting for a Federal approval process that could come in decades, if it ever comes at all.
Of course, in this economic climate every part of county government faces tight budget constraints. With strong regional and national competition for transit dollars, we cannot afford to be complacent. As Councilmember, Hans will work every day to reach out to our state and federal representatives to ensure we speak with one loud voice for local transit.
Hans’ ability to create alliances and work strategically has earned him the endorsement of the chair of our state delegation, Brian Feldman, the Chair of our Ways & Means Committee, Sheila Hixson, as well as Delegates Bill Frick, Tom Hucker, Karen Montgomery and Kirill Reznik, among others -- a diverse and county-wide roster of state leaders (for a complete list visit www.hansriemer.com)
Hans Riemer has been endorsed by the Sierra Club for his vision of Montgomery County — a network of tightly-knit, walkable, mixed-use communities interconnected by high quality transportation alternatives, including better transit, walking, and biking options. Sustainable growth, both socially and environmentally, is the only way our county can continue to be the great place to live in the future that it is today.
Following is a policy piece released by council at-large candidate Hans Riemer's campaign connecting transit, the environment and agriculture. #####
As we pursue policy change at the national and global level, we must change how we live in Montgomery County to reduce our environmental impact. Here we have vibrant downtowns, leafy suburbs and rolling farmland, all coexisting symbiotically. A core challenge facing policy makers today is how to make sure that generations from now, families will still have the chance to live here with a high quality of life and make decisions for the future that will benefit people for generations to come.
Our environmental challenge is intertwined with our economic and fiscal challenge. As our tax base shrinks, we cannot support our schools and parks. We must bring new jobs and housing to Montgomery County without degrading our quality of life and environment. The key to the right balance is to focus jobs and housing around mass transit hubs, such as Metro stations. By redeveloping in areas that already are fairly dense, we can provide affordable housing and commercial space to attract new businesses without cutting into the Agricultural Reserve or changing the character of quiet neighborhoods. And by offering our residents the ability to live and work near public transportation, we can reduce the number of cars clogging our roads.
Changing our development strategy to prioritize walking, biking and public transportation:
We need new jobs and housing, but we are maxed out on cars. If every job comes with two parking spots and every house with three cars, no-one will be able to drive anywhere. We must change our plan for the future to prioritize walking, biking and public transportation in our new development projects, with a goal for downtown areas that half of all commuting trips should be walking, biking, or transit.
The goal of this change in strategy is not to force everyone to stop driving. Just the opposite -- it is the only way to make sure that people can still drive around the county. Change future development to reduce the number of new cars on the road while offering real alternatives that are better than driving will benefit everyone. We will get there by supporting Metro as a world class system, bringing new light rail with the Purple Line and Corridor Cities Transitway, protecting RideOn bus services, and building rapid transit routes on our commuting corridors county-wide.
Sustainable Agriculture:
Montgomery County is the only county in the region which still has the ability to produce a substantial amount of agricultural output, and increasing demand for locally-grown food, which is more healthy for our families and our environment, makes protecting the Ag Reserve more important than ever. As recently reported in the Washington Post, agriculture “contributes more than $243 million annually to the county economy, and local farms employ more than 10,000 residents.” We must strengthen protections for the Ag Reserve as we create better incentives to re-develop in areas that already have development outside the Ag Reserve.
Environmental Education:
At the volunteer level, the county can organize neighbors to go door to door and educate people about simple efficiency fixes, and even make some of them, such as weather stripping doors, right on the spot. There are also Federal grants to support this kind of work, and we should work harder to leverage that money into the county during tough budget times. We should focus on county educational programs to teach residents how to achieve long-term cost-savings from simple actions, such as insulating and sealing homes and buildings.
The Amalgamated Transit Union Local 689's questionnaire is worth reading. In an election season in which unions have come under fierce attack, especially from the Washington Post, it provides a valuable example of how unions can understand an issue and advocate in the public's in addition to its own interest.
Certainly, ATU Local 689's dissatisfaction with Metro infrastructure maintenance and the need to make it our first transit priority reflects public sentiment. As Jon Weintraub of the Bethesda Civic Coalition has repeatedly pointed out, major bottlenecks occur regularly at Bethesda Metro where the short escalators leading to the platform are under repair for several months. It's also common for the long escalators from the station to the bus terminal to to break down. Frequently, riders have to walk down what were once termed the "longest escalators in the free world" so that the one sole remaining functioning escalator can carry riders to the street.
Questions 1-8 from the ATU Local 689 questionnaire below the fold: 1. Unlike every other major transit system in the nation, WMATA has no dedicated stream of operating funds from the jurisdictions it serves except for a small gasoline tax in Northern Virginia. Instead, it has to request operating funds annually from each jurisdiction. Do you support establishing an adequate ongoing funding formula for WMATA?
2. There is some thought that having annual revenue targets for WMATA capital and operations that included both service expansion and inflation factors makes more sense than a single region-wide tax source (each jurisdiction decides on its source of dedicated revenue). Such an agreement was made for the "Metro Matters" capital funding program. Would revenue agreement(s) for capital & operations make more sense than a single dedicated funding source?
3. WMATA has a backlog of capital needs including repair and preventive maintaenance projects estimated to cost $11 billion over the next ten years. In October 2008, Congress passed Public Law 110-432, providing for $1.5 billion in federal funding for Metro repairs over ten years as long as Virginia, DC, and Maryland each allocated $50 million annually in matching funds and allowed the addition of two voting Federal representatives to the WMATA Board of Directors. Do you support the continued allocation of Maryland's local commitments plus the $50 million annually for ten years to make vital repairs to Metro?
4. The federal government and jurisdictions throughout the region have invested billions of dollars in WMATA capital infrastructure and operational expertise. There are a number of transit expansion projects including the Maryland "Purple Line." Some have argued that a proliferation of different technologies employed is inefficient and that stand-alone systems will result in redundant costs.
(a) Do you favor WMATA coordinating the technology for the different transit investments?
(b) Do you favor utilizing WMATA to operate this proposed systems, using WMATA's existing infrastructure, including heavy track equipment and overhaul facilities, to reduce capital and operating costs?
(c) Do you support paying wage and benefit levels on the "Purple Line" similar to those paid by WMATA?
5. Will you oppose any future proposals to replace Metrobus routes operated by workers who received decent wages and benefits with routes operated by private companies that provide inferior wages and benefits?
6. Both Montgomery & Prince George's Counties are trying to move forward with mixed use transit-oriented development around Metro stations. This often requires increasing density and sometimes requires incentives. Do you generally favor this type of development?
7. As our roads become increasingly clogged, many argue that we cannot keep widening existing roads or building new roads to serve population growth. One proposal to address this situation is to enact a principle known as "bus priority" to utilize existing road capacity more efficiently. The characteristics of bus priority measures include everything from holding signals for a few seconds for a bus to get through the intersection to wholly dedicated bus lanes. Do you support the implementation of bus priority measures on major arteries such as Veirs Mill Road, University Blvd., New Hampshire Ave, Route 1/Rhode Island Ave., Martin Luther King Jr., Branch Ave. and other appropriate corridors?
8. The collective bargaining provisions of the WMATA compact have been in place since the takeover of private bus companies. There has not been a strike since illegal wildcat strikes in 1978. There has been only one arbitration award since 1980 the vast majority of labor agreements have been negotiated settlements. Periodically, there are legislative attempts to change WMATA collective bargaining law. Do you favor keeping the existing system in place?
The Post and the Sun both remarked on former Governor Bob Ehrlich’s preference for bus over rail on the Purple Line last week. Governor Martin O’Malley’s administration picked light rail for the project. But the difference between the two candidates on transit goes much further than that. Ehrlich’s opposition to rail on the Purple Line and his friendship with project opponents in the Columbia Country Club is a matter of public record. We summarized it in an April 2008 blog post:
The Columbia Country Club has a long history of fighting the Purple Line. Between 2001 and 2006, four of the club’s current officers – President McNamara, First Vice President Joseph J. Brigati, Second Vice President Eugene A. Carlin and Secretary Martin Wiegand II – collectively contributed $4,600 to former Governor Robert Ehrlich and $550 to Senate Budget and Taxation Committee Chairman Ulysses Currie. (One can only imagine how much more was donated by the club’s full membership.) In September 2003, Ehrlich reciprocated, declaring that the Purple Line “will not go through the Country Club.” Robert Flanagan, his Transportation Secretary, explained, “The Governor happens to love golf.”
At the same time, then-District 18 Delegate and Chevy Chase resident John Hurson struck a deal with Ehrlich to route buses along Jones Bridge Road as a substitute for the Purple Line. In return, Hurson reversed his position on slots from opposition to support, matching Ehrlich’s agenda, and was promptly rewarded with a fundraiser by racetrack owner William Rickman Sr. Hurson and Ehrlich’s arrangement infuriated many Montgomery County politicians but no doubt delighted the country club’s members.
But that is not all. The transportation spending decisions made by Governors Ehrlich and O’Malley while in office have been very different. Consider this chart on the six-year transportation capital spending plans promulgated by the two Governors that we published in September. The plans starting in Fiscal Years 2003, 2004, 2005 and 2006 were drafted by the Ehrlich administration. The plans starting in Fiscal Years 2007, 2008, 2009 and 2010 were drafted by the O’Malley administration.
In the Ehrlich years, transit capital spending through MTA and WMATA accounted for 27-29% of all transportation capital spending. Under O’Malley, transit spending hit 35% in his last two years. O’Malley boosted transit’s share by largely protecting the capital budgets of both MTA and WMATA while applying transportation cuts mostly to roads. The Democrats have been inexcusably slow to finance new transportation projects, but Ehrlich – who is running on a sales tax cut – would be even worse.
O’Malley is far from perfect. The Post and Greater Greater Washington were right to criticize his administration for recently holding back a capital payment to WMATA. But looking at the overall record, the contest for Governor presents a very easy choice for transit advocates.
Last week, we wrote about a proposal originating in the Senate Budget and Taxation Committee that would have recommended that the Maryland Transit Administration (MTA) study heavy rail for the Red Line, Purple Line and Corridor Cities Transitway (CCT). We characterized the language as a “poison pill for transit” that would have subjected the three projects to waste, delay and increased costs and possibly put them behind competitor projects seeking federal funding. Purple Line supporters in Montgomery County immediately accused Senator Rich Madaleno (D-18), a long-time Purple Line rail opponent, of being behind the language. That prompted us to investigate. Madaleno represents District 18, which includes Chevy Chase, Kensington, Silver Spring and Wheaton. A group of residents in and near Chevy Chase oppose building the Purple Line as a rail project since it would run along the Capital Crescent Trail, which they believe would be endangered by it. The trail cuts through the golf course owned by the Columbia Country Club, so they too oppose running rail through it and even tried to organize a fake “grass roots campaign” against it. In part because of the influence of residents, many District 18 officials have opposed at-grade rail on the trail, including former House Majority Leader John Hurson, former Delegate Jane Lawton, and current Delegates Jeff Waldstreicher and Al Carr. Delegate Ana Sol Gutierrez defiantly supports rail and has been elected to the legislature twice despite that fact.
Madaleno is definitely a rail opponent. In 2003, then-District 18 Delegate John Hurson – a wily strategist who was at that time one of Montgomery County’s most prominent state legislators – cut a deal with new Republican Governor Bob Ehrlich to study the Purple Line as a bus project off the trail. When Hurson introduced a bill to prohibit construction of the Purple Line as a rail project, then-freshman District 18 Delegate Rich Madaleno was its only co-sponsor. Hurson retired from the legislature in 2005, but Madaleno ran uncontested for the District 18 Senate seat in 2006 and has been rising through Annapolis ever since. Madaleno remains a Purple Line rail opponent. Last year, he said the following in his testimony about the project before MTA:
During the course of my 20 years in and around the General Assembly, I have seen and heard all of the arguments for and against the Purple Line. After many years of discussion, planning, and community outreach, I still have very serious reservations about this project, from a fiscal standpoint, from an operational standpoint, and with regards to the effects it will have on the communities in our region…
Quite frankly, the state does not have the resources to pay for any of the Bus Rapid Transit (BRT) or Light Rail Transit (LRT) options. Over the past decade, the only major new construction projects the state has moved forward with have been funded primarily with toll-backed revenue bonds. There are no alternative funding mechanisms available for this project. As a member of the Senate Budget and Taxation Committee, I feel confident in reporting that no new revenue options appear politically feasible in the foreseeable future.
So when the Senate Budget and Taxation Committee insisted that the three transit projects be studied as heavy rail – a move exposing them to waste, delay and cost increases – Purple Line supporters believed Madaleno was behind it. As the only known Purple Line rail opponent on the committee, he was a logical suspect.
But it’s just not true.
Multiple sources confirm that the language originated with Baltimore City Senator George Della (D-46). Della represents Baltimore’s Canton neighborhood, which opposes the MTA’s chosen Red Line alignment since it runs at-grade rail on one of their main streets. As a result, Della is an open opponent of the current Red Line configuration. On behalf of his constituents, Della asked Senator Ed DeGrange (D-32), who chairs the Capital Budget and Public Safety, Transportation and Environment Subcommittees, to introduce language requiring heavy rail study for the Red Line only. Baltimore City Senator Verna Jones (D-44), who supports the Red Line, told us on the record that she amended the language to include the Purple Line and CCT so that none of the three projects would be disadvantaged relative to the others. Senator Jones also told us on the record that Madaleno had nothing to do with the matter.
Following is the relevant language approved by the Budget and Taxation Committee:
Impact of Federal Changes on New Start Projects: The Federal Transit Administration (FTA) recently announced major changes to its New Starts justification criteria. The changes in the criteria could have impacts on the major transit lines that the Maryland Transit Administration (MTA) is currently evaluating. In light of the changes in the criteria, MTA shall do a full study of any and all reasonable heavy rail or automated guide way alternatives, including alternative alignments for the Red Line, the Purple Line and the Corridor Cities Transitway. MTA should also consult with various transit rider groups in the preparation of this study.
There’s one more wrinkle here. The language above was not included in the budget bill. If it was, it would have binding force of law. Instead, it is “narrative language” from the committee, meaning that the committee is requesting the studies from MTA. We are told that whether MTA is actually required to complete the studies by this language is an ambiguous question.
In any event, the House has rejected the language at the behest of Prince George’s County Delegate Tawanna Gaines (D-22), a House Appropriations Committee member and solid Purple Line supporter. Whether it survives budget negotiations between the two chambers is anyone’s guess.
Purple Line advocates need to keep the big picture in mind. The Purple Line has to pass three hurdles to become a reality. First, it has to be designed as a cost effective project that makes a significant, long-term contribution to the area’s transit system. Project supporters won that battle when the Governor settled on a light rail configuration using the Capital Crescent Trail. Second, the project has to receive federal funding. That is a matter of bureaucratic negotiation between MTA and the Federal Transit Administration. It is unlikely that either supporters or opponents can influence that process other than by slipping microphones spouting their messages under the bureaucrats’ pillows late at night. Third, the state has to come up with its share of the financing. This is a critical issue. The General Assembly’s Department of Legislative Services believes the Transportation Trust Fund is in such dire condition that the state may have to pick just one transit project to fund – assuming it can afford any of them. If the Purple Line makes it past the feds, state funding will be a HUGE issue.
And here is where Madaleno can be an ally. While he has not been supportive of the Purple Line, he has an outstanding record on seeking new money for transportation. The General Assembly has shown a disgraceful unwillingness to raise money for transportation projects. They will never pass a revenue increase without the support of the Montgomery County delegation, and Madaleno is the delegation’s Senate Chair. Furthermore, Madaleno’s budget expertise will be needed to craft a revenue increase that will be both adequate and politically feasible. So whether they like it or not, Purple Line advocates need Madaleno’s help in making sure the state can afford its share of the project costs. That help will be easier to obtain in the absence of unfounded accusations.
Disclosure: The author is the Treasurer of the District 18 Democratic Team, which includes Senator Madaleno.
The Senate Budget and Taxation Committee has recommended that the Maryland Transit Administration (MTA), which is responsible for planning the three major transit projects under consideration by the state, return to the drawing board to study heavy rail options for all three. Whether the Senators asked for this in good faith or bad faith, the proposal is in fact a poison pill that threatens the viability of all three projects. The reason is cost. In order to receive federal funding, transit projects are evaluated on the basis of cost per hour of user benefit. The lower this ratio is, the more cost effective the project is and the greater the likelihood it will be funded. The Obama administration is re-evaluating federal rules for funding transit projects – and that is probably a good thing – but it is inconceivable that some measure of cost effectiveness will not be included.
In an earlier blog post, we demonstrated that all-surface light rail on Baltimore’s Red Line, BRT on the Corridor Cities Transitway (CCT) and multiple light rail and BRT options for the Purple Line all passed the federal cost effectiveness threshold. Subsequently, the state picked light rail options for both the Red and Purple Lines and began the process of competing for federal funds for those projects. (No option has been picked yet for the CCT.) The Red Line barely passed muster as light rail. MTA insisted on burying it through a large part of Downtown Baltimore and had to use a danger-prone single track tunnel and last-minute ridership“revisions” to squeeze it past federal standards. But the Purple Line is not much below the federal cost effectiveness threshold either. So as light rail projects, the two transit lines are competitive with dozens of other projects from around the country, but neither is a sure thing. Given this cost structure with light rail, MTA head planner Henry Kay is 100% correct when he criticized the feasibility of more expensive heavy rail:
Henry Kay, deputy administrator of the MTA, said he didn’t expect the study to change anything. He said it was “impossible” that the federal government would find a heavy rail alternative suitable for Baltimore. Cohen and others have argued that the MTA didn’t study heavy rail in enough detail.
The budget language originally only included the Red Line, but was extended to the other two transit proposals before a final committee vote.
Kay said it would set the MTA’s planning back years if it had to study heavy rail as comprehensively as it had looked into the light rail plans. He said the agency’s preliminary take was that heavy rail would not make the cut, even in light of the new regulations.
“It was far out of the range of what is being considered nationally,” he said.
The House has not passed such a provision and is currently negotiating the budget with the Senate. If the Senate’s provision holds, it will have three outcomes.
1. Waste MTA has already spent $47 million to study the Red Line, $43 million to study the Purple Line and $8 million to study the CCT. Each project has tens of millions of dollars in additional spending scheduled over the next several years. This demonstrates a central fact: planning costs lots and LOTS of money. If the three transit projects have to be carefully budgeted to be viable as light rail, why bother to study heavy rail options which are absolutely sure to cost more money and fail federal cost effectiveness tests?
2. Delay Planning is both expensive and time consuming. Study of heavy rail options will delay all three projects for several years, causing them to fall behind competitors from across the country in the funding queue. And that is not all: they could fail to receive funding entirely. While the Obama administration has expressed an interest in steering more money to transit, there is no assurance that future administrations will share that commitment.
3. Cost Increases The end product of delay is cost increases. Now is a good time for owners to build because the global recession has dampened demand for both labor and materials. But as years pass and the economy recovers, costs are bound to go up. That means even if the Red Line or the Purple Line wind up getting built after years of delay, they will cost much, much more. And those cost increases will come directly from the pockets of Maryland taxpayers.
And so the Senate is dispensing a poison pill for transit. Will the House swallow it? We’ll see.
Update: The House rejected the proposal. The two chambers still have to reconcile their conflicting budget language.
A recent Sun article indicates that the General Assembly is considering cuts to Baltimore’s highway aid from the state. We are not in the habit of defending aid to Baltimore, but we believe these legislators are barking up the wrong tree. The state aid program under scrutiny is Highway User Revenues (HUR), which is a portion of the Transportation Trust Fund sent out to the counties and the City of Baltimore to pay for street maintenance and other transportation-related expenditures. The Governor’s original FY 2010 budget contained $480 million in HUR distributions, including $194 million for the City of Baltimore. But the General Assembly and the Board of Public Works both cut HUR sharply by transferring much of it to the general fund to plug deficits. (Ironically, the Democrats had once criticized former Governor Bob Ehrlich for “raiding” transportation spending.) Proposed HUR is now down to $140 million for FY 2010-2012, with Baltimore due to receive $130 million. General Assembly budget analysts are advocating that $30 million of that money go to other jurisdictions instead.
Why does Baltimore get so much HUR money? The reason is because the State Highway Administration (SHA) does not own or maintain any roads in city limits. In the rest of the state, nearly all of the arterials are maintained by SHA. In Montgomery County, SHA roads include Wisconsin Avenue/Rockville Pike, US-29, Georgia Avenue, Connecticut Avenue and even secondary streets like Piney Branch Road and Bradley Boulevard plus many, many more. SHA spends hundreds of millions of dollars maintaining its street network every year. The City of Baltimore gets none of that money. So if the city’s HUR proceeds are distributed elsewhere, city residents will have to pay for their own pothole repairs while other Marylanders will see their arterials kept up by the state. Even such a MoCo partisan as your author would hesitate to do that to Baltimore.
But that does not mean the city should go untouched. In fact, Baltimore is the beneficiary of three special deals that no other jurisdiction gets: the state has assumed responsibility for its community college, detention center and central booking facility. In FY 2011, those costs are projected to total $182 million.
There is absolutely no reason why every other jurisdiction should have to bear responsibility for its own community college and jail while Baltimore gets a free ride. The city should be treated the same way as everyone else. And since the state sends aid to subordinate jurisdictions on the basis of wealth formulas, the city would likely get a big chunk of its college and jail costs from the state anyway.
The General Assembly should treat all of Maryland fairly. That means letting Baltimore keep its street maintenance money but also ending its illegitimate freebies once and for all.
A recent analysis by the General Assembly’s Department of Legislative Services (DLS) shows that conditions for the Transportation Trust Fund (TTF) are becoming so dire that the state will have to sharply cut back new capital spending and even pick just one transit line to build between the Red Line, Purple Line and Corridor Cities Transitway. All of our bone-shaking predictions for transportation funding appear to be coming true. In Maryland, most funding for transportation projects is derived from the TTF, which is financed by a variety of sources. Below is the revenue distribution for the TTF in Fiscal Year 2011 (which begins on 7/1/10).
However, only a minority of the TTF is used for actual transportation projects. Most of it goes to operating costs for the Maryland Department of Transportation (MDOT), revenue distributions to the counties (or now, the general fund) and debt service.
Most TTF revenue sources are forecasted to grow through FY 2015, although some (like motor fuel taxes) are projected to grow quite slowly.
The problem is that TTF spending obligations could very well grow more rapidly than revenues. DLS believes that the Maryland Transit Administration (MTA), which operates MARC trains and Baltimore’s bus and rail services, could be under-budgeted by as much as $30 million in FY 2011. DLS also notes the short-term problem of vast spending on snow removal – and that was before the giant February storms. And DLS points out, “Another potential looming expense is the outcome of the binding arbitration process MTA is in with the unions regarding salaries and benefits which could result in back salary payments being made for fiscal 2009 and moving forward.”
The most serious problem involves MDOT’s ability to finance interest payments on its bonds. DLS notes:
In its agreements with bondholders, MDOT has agreed to maintain a coverage ratio of prior year net income and pledged taxes at 2.0 times greater than the maximum annual debt service in a given fiscal year. If the department falls below the 2.0 times coverage ratio, it has agreed not to issue additional bonds until it exceeds 2.0 times coverage. To ensure fiscal prudence, historically, MDOT has maintained an administrative coverage ratio of 2.5.
But MDOT has temporarily dropped its coverage ratio below 2.5 to a range of 2.2-2.3 in Fiscal Years 2011, 2012 and 2013. Why? Because MDOT has sought to minimize cuts to its capital budget beyond the ones it has already made. While MDOT’s desire to maintain as much of its capital program as possible is admirable, the problem is that if revenues fall short of its forecasts, its coverage ratio may fall below the level of 2.0 it has pledged to bondholders. If that happens, MDOT will not be able to issue more bonds and that will cause significant capital financing problems.
The end result of all of this is that rising debt service and operating budget levels will eat up most of the revenue increases that may materialize in future years, thereby squeezing the capital budget. That will greatly handicap the state’s ability to construct new infrastructure of all kinds.
As we show below, capital spending is projected to actually FALL in the out years.
DLS summarizes the TTF’s outlook in words both grim and blunt:
As previously highlighted, downside risks exist in MDOT’s current TTF forecast. Titling revenue estimates may be ambitious, federal authorizations are likely to decrease significantly absent federal tax increases, there is no additional State debt capacity, and debt service coverage levels remain below administrative levels and close to the minimum required in bond covenants. The operating budget appears understated relative to actual experience, particularly for snow removal and transit operating costs. Furthermore, the forecast does not appear to account for potentially higher costs due to inflation, eventual employee cost-of-living raises, or the effects of higher interest expense that are likely to accompany an economic expansion.
It is becoming increasingly likely that planned capital spending currently outstrips available revenues in the six-year forecast. In addition, the department continues to pursue three transit lines that would require several billion in State and federal dollars to construct and tens of millions in State funds to then operate. Other major funding needs exist for dredging, chromium ore remediation, bridge rehabilitation, homeland security, MARC Growth and Investment Plan, freight funding enhancements, as well as continued investments in highways and transit to mitigate congestion.
In sum, this forecast calls into question MDOT’s ability to meet its current operating and capital commitments, much less its ability to respond to other unmet needs even if a robust economic recovery provides the level of revenue already estimated. The department, and General Assembly, in the future could be confronted with having to pick one transit line to construct, increasing pressure for a major revenue as the department cannot continue to constrain operating costs and meet debt service coverage levels as planned and the demand for capital projects continues to increase, and debt issuances are constrained by overall State debt limits.
You read that correctly, folks. DLS is repeating the warning that we issued in January: the state currently cannot afford its share of the cost of the Red Line, the Purple Line and the Corridor Cities Transitway simultaneously, or even two of them. Without a new revenue source, it may have to pick one. And as for the other new projects... what projects?
Curitiba’s system is respected around the world and has inspired other BRT systems in Latin American cities including Bogota, Mexico City and Guatemala City, as well as U.S. cities including Cleveland, Pittsburgh, and Los Angeles. Click here to see a good overview of the system in Portuguese, but with easy-to-understand graphics. Click here to see a map of bus routes.
The genius of the city’s plan is that on primary streets, the center two lanes of traffic have been reserved for buses. This enables the buses to avoid automobile traffic and move smoothly, with minimal interruption. “Tube” stations are placed every 500 meters along primary routes. A city law states that no resident may live more than 500 meters from a bus stop, so the primary and collector routes cover the entire residential area.
Inside a tube station.
On the main bus line, the 351 tube stations are sleek and modern. Passengers pay when they enter the station, avoiding a delay when entering the bus. The buses are long, with several doors allowing passengers to enter and the bus doors correspond with several doors at each station, enabling speedy entrance to and egress from the buses. Buses on primary express routes are “bi-articulated,” containing three cars with accordion-style dividers that enable them to navigate tight turns quickly and efficiently.
This video demonstrates a biarticulated bus navigating a tight turn.
Within the stations, bus stops are identified with a clear map similar to the Metro route map. A tourist like myself can easily navigate most of the city by following the bus route on a map. Unfortunately, because the buses are used on multiple routes and because the bus network covers so much territory, complete routes are not shown inside every bus.
A single fare of R$2.20 Brazilian Reals (U.S. $1.22) enables a rider to take a single bus as far as it travels, even from Curitiba’s furthest suburbs into the city center. Fare revenue accounts for 100 percent of Curitiba’s operating budget. (Its capital budget – the cost of building the system – came from international investment including the World Bank and French Development Agency.)
Property values adjacent to the bus line have shown consistent increases when new express routes are constructed, increasing tax revenues to local governments. Buses utilize 20% Biodiesel to minimize emissions of carbon and other pollutants.
Less Positive Aspects of the System
My son Daniel Leventhal rides the bus.
Because the current system dates to 1974, the 29 primary bus terminals that facilitate transfers between collector and primary bus routes are aging. The two I visited were not especially attractive, and abundantly covered with graffiti.
Ms. Dos Santos told me that “the rich do not use the system much.” Those who have access to the comfort and privacy of their automobiles opt out of using the BRT system. In general, I did not find the BRT experience comparable to fixed-rail systems in terms of comfort. Curitiba does not have a Metro rail system, although there are plans to construct a rail line in time for the 2014 World Cup.
Lessons for Montgomery County, Maryland
Taken from inside an express bus, this photo shows the division of the BRT lanes from automobile lanes.
According to Ms. Dos Santos, the rate of automobile ownership in Curitiba is 22%, while transit usage is 40% and the balance of commuters travel by motorcycle or motor scooter, or walk. This helps to explain why ridership of the BRT system is so high and why farebox revenues cover operating costs.
Another important difference is the price of gasoline, which is substantially more expensive in Brazil (R$2.49 Brazilian Reals per liter, or approximately U.S. $5.20 per gallon, while I was there) than in the U.S., making automobile travel substantially less affordable for working Brazilians.
The critical question is whether increased frequency, speed and convenience would persuade enough Montgomery County residents to ride the bus to make the system financially sustainable. Even in Curitiba, where per capita income was R$17,977 Brazilian Reals (U.S. $10,005) in 2006, upscale people do not ride the bus – and there are far more upscale people in Montgomery County, where per capita income is U.S. $35,684.
The county’s current Ride-On bus system generates only approximately 15% of its revenue from fares, with the remainder subsidized from general tax revenues. The current budget crisis has highlighted the Ride-On system’s significant expense to taxpayers, although the County Council has so far resisted cuts in Ride-On service proposed by the County Executive. How much more can we afford to expand the bus system even if the current 85% subsidy from all taxpayers decreased to a subsidy of 80%, 75% or lower?
Also relevant is that the county’s bus storage and maintenance facility is at its absolute limit of available space, and a new storage and maintenance facility proposed for Clarksburg has been delayed because of concerns over runoff into Ten Mile Creek, so there is currently no place to store additional buses in the county.
An express bus departs from tube stations.
Curitiba has a long history of transit service, dating back to horse-drawn trolleys in 1887. Planning for 20 primary express bus routes began in 1966 and the system opened in 1974. For more than 35 years, primary roads have been designed to accommodate the BRT system. Municipalities in the Curitiba region served by URBS delegate management of the transit system to URBS, whose board members are appointed by the Mayor of Curitiba.
In Montgomery County, however, major roads would need to be redesigned to accomodate bus rapid transit. The state of Maryland’s recent reconstruction of Route 29 represented a critical missed opportunity to develop express bus lanes in the middle.
Our county’s primary roads (Route 29, New Hampshire Avenue, Georgia Avenue, Connecticut Avenue, Routes 28 & 198, Veirs Mill Road, University Boulevard, Wisconsin Avenue/Rockville Pike, and I-270) are owned, designed and maintained by the State Highway Administration. Close coordination between the county, the state and possibly the Washington Metropolitan Area Transit Authority (WMATA) would be necessary to accomplish the BRT vision. Ridership will be a very important criterion for winning federal funding – and ridership is the key question regarding whether the system can succeed here.
Accommodating through automobile traffic on primary roads will be another key issue. Because the buses travel on a dedicated route, automobiles may not cross primary streets at every intersection. In Montgomery County, this will affect many neighborhood streets whose residents are accustomed to being able to cross major streets or make left and right turns to exit their neighborhoods – all of which could be restricted with rapid bus routes down the center of major streets.
My visit to Curitiba was a great experience and there is no question that I would love to see similar technology employed in Montgomery County. In the near term, I will advocate for BRT on Veirs Mill Road, which along with University Boulevard has just received a federal grant for bus transit improvements, and Georgia Avenue. I am also optimistic about prospects for BRT on the Inter County Connector and the proposal for BRT on Rockville Pike contained in the White Flint Sector Plan, now pending before the County Council.
On the other hand, my visit to Curitiba did not persuade me that BRT compares favorably to fixed-rail systems as an effective inducement for riders to leave their automobiles at home. I will continue to advocate strongly for light rail on the Purple Line and, while I understand that cost factors may ultimately persuade Governor O’Malley to select BRT for the Corridor Cities Transitway, my preference remains light rail for that system as well.
George Leventhal is an at-large member of the Montgomery County Council. He serves on the Transportation, Infrastructure, Energy and Environment Committee.
Senator Rob Garagiola (D-15) is reviving a good idea that did not make it through the General Assembly last year: a commission to examine transportation revenues. Yes, we know that commissions by themselves do not fix problems. But transportation funding is a BIG problem with a solution that many politicians just don't want to talk about: new revenues. Last year, the State of Oregon passed a $300 million per year transportation funding bill after its Governor crusaded for it on the basis of job creation and a commission built widespread support for it. Garagiola's bill, which has many Republican co-sponsors, is a step towards getting serious about transportation.
Today, we are going to let you in on a little secret. Transportation projects are built with happy talk. Tax revenues are not necessary. What, didn’t you know? All of Annapolis knows this, and now so do you. Why do we say this? Because this is what we hear from our leaders. We trust them, right? Our Governor announced that he wants to build a light-rail Purple Line at a cost of $1.517 billion. On the same day, the Governor announced that he wants to build a light-rail Red Line at a cost of $1.63 billion.
And of course, let’s not forget the Corridor Cities Transitway (CCT). The state has made no commitments regarding its mode and alignment, but the CCT’s Draft Environmental Impact Statement (DEIS) estimates a capital cost ranging from $450 million for bus-rapid transit to $778 million for light rail. No one is ruling out the CCT. In fact, our leaders are encouraging us to believe that we can have all three projects!
So how are we going to pay for them? Well, we are going to apply for federal money. But the three projects will have to compete with other transit lines from across the country. And the Federal Transit Administration’s approval process is arduous. But let’s assume that all this Happy Talk is correct and our three projects will beat everybody else from all over the U.S. What about the money?
The Governor said this about the Purple Line in the Gazette: “...We are assuming at least half the projected $1.5 billion cost would come from discretionary federal funds that will otherwise go to another state.” Separately, the Gazette reported that the state would have to pony up $900 million each for its share of the Red Line and the Purple Line. So for the two projects, the state’s share would range from $1.6-$1.8 billion. Half the cost of the CCT would add $225-389 million. What does that mean for taxpayers?
Last year, the General Assembly’s Department of Legislative Services calculated that a one-cent increase in the gas tax would raise about $30 million per year in revenue. Now none of the three transit lines will be built overnight. Let’s be generous and assume that the cost of any of them would be spread over the entire six-year horizon of the state’s Consolidated Transportation Program. That means the Red Line would cost $136-150 million per year in state money, the Purple Line would cost $126-150 million per year in state money and the CCT would cost $38-65 million per year in state money. Those amounts are not laying around in the state’s already-depleted Transportation Trust Fund (TTF), so they would have to be raised through new revenues. Divide all of the above amounts by $30 million – the state’s estimate of the yield of one-cent of gas tax – and the gas tax would have to go up by 4.5-5 cents for the Red Line, 4.2-5 cents for the Purple Line and 1.3-2.2 cents for the CCT.
But there’s more. The rest of the state will not simply pay more gas taxes for the sole benefit of the four jurisdictions served by these three transit projects (Baltimore City and Baltimore, Montgomery and Prince George’s Counties). If there is any revenue hike, the other jurisdictions will demand money for their priorities. It’s only fair and that is how Annapolis works. The four jurisdictions above account for about half of the state’s population. So if the rest of the state is to benefit equally from a revenue hike, the above figures would have to be doubled. If the money is raised from a gas tax hike, the tax would have to go up by 20-24.3 cents. The present gas tax, which has not changed since 1992, is 23.5 cents. In other words, to pay for the state’s share of all three transit projects plus an equal amount for the rest of the state’s transportation needs, the gas tax would have to DOUBLE.
How likely is that to happen?
During the 2007 special session, the General Assembly turned down the Governor’s proposal to index the gas tax. Instead, the legislature raised a projected $400 million per year by boosting the titling tax and devoting a portion of sales and corporate income taxes to the TTF. These changes were supposed to generate $150 million for new projects and $250 million for system preservation every year. But by November 2008, the changes were only collecting an extra $265 million per year, almost all of which was going to maintenance. In other words, the last great effort to raise more money for transportation has almost completely failed to generate ANY money for new projects.
How many legislators are serious about raising more money for transportation? Very few. Here are the only ones to sponsor or co-sponsor revenue-raising bills since the special session:
Delegate Charles Barkley (D-39) – lead and only sponsor of a 2009 bill to raise the gas tax by 10 cents. Also the lead and only sponsor of a 2009 bill to raise the gas tax by a half-cent and index it.
Delegate Bill Bronrott (D-16) – lead and only sponsor of a 2009 bill to index the gas tax.
Delegates Sheila Hixson (D-20), Jon Cardin (D-11) and Bill Frick (D-16) – co-sponsored a 2009 bill to raise the gas tax by 5 cents.
Senator Rich Madaleno (D-18) – lead and only sponsor of a 2009 bill to raise the gas tax by 5 cents and redistribute its proceeds.
That’s right, people – exactly SIX of the 188 state legislators have put their names on bills to raise more money for transportation since the special session. None of them came from Baltimore City (which would get most of the Red Line) or Prince George’s County (which would get part of the Purple Line). And none of these bills would have raised enough money to fund the state’s share of its multiple transit proposals, much less all the other worthy projects in Maryland. Meanwhile, fifteen legislators – including thirteen Republicans – co-sponsored a 2009 bill that would have cut transportation funding. Two of these legislators - Delegates Joseph Boteler (R-8) and William Frank (R-42) - represent Baltimore County, which would get four stations on the Red Line. They swim in the murkiest alligator pit of hypocrisy.
None of this matters, we are told. We can have it all – the Red Line, the Purple Line, the CCT and lots of other nice things too. Maybe there will be a little bit of a revenue hike after the election. But what happens if gas sells for $4+ per gallon in 2011? What happens if Democrats lose state seats over the issue of taxes and the economy? What happens if President Obama’s numbers are down further and Democrats suffer massive losses in Congress? What then? The Lords of Annapolis don’t want us to ask these questions. It’s not real nice of us to do so.
And so in the Great Choir of Happy Talk, nearly all of the state politicians of both parties and all regions are singing along. Happy talk buys what revenue increases will not. Everyone inside Annapolis wins.
Last time we looked at three of the five items on my list of things to watch for in 2010. Here are the last two. 4. How are Those Deficit Projections?
If you follow the County or State government, you may have noticed a familiar pattern. The Board of Revenue Estimates or the County Office of Management and Budget will announce a projected deficit. Cuts ensue. A few months later, they come out with new numbers and the cutting begins anew. At the state level, that has left the Board of Public Works to do a lot of heavy lifting because the legislature is not in session year round. The current projections for 2010 are $2 billion and $600 million shortfalls at the state and county respectively.
The general consensus is that the worst is behind us and the projections are becoming more accurate as the economy stabilizes. If that is true, deficits will recede as an emergency issue and budget cuts will not crowd out all other action. However, we will likely still hear about structural deficits requiring longer term budget reform (sorry Robin Ficker, that will include the revenue side too). But if the economy double dips into a recession or the recovery is particularly slow, we could continue to face budget shortfalls larger than expected and an increased need for cuts.
5. What is Going on with the Unions?
There are lots of interesting issues with the unions in 2010. Will they be willing to offer contract concessions to help the budget situation, as they did this year by giving up cost of living adjustments? How effective will the teachers be in lobbying on the maintenance of effort issue and the threat of shifting pensions to the counties? Will the Career Firefighters be able to help overcome the Volunteer Fire-Rescue Association’s resistance to an ambulance transport fee? Will the Apple Ballot maintain what Adam Pagnucco calls its status as the WMD of Montgomery County politics by reprising its 2006 success rate? Love them or hate them, and I talk to a surprising amount of Democrats on both sides, the unions have a huge impact on the County and its direction in 2010.
A Few Runner-Ups to Keep an Eye On:
1. What is Frank Kratovil doing? I think the guy is in real political trouble. The question is does he spend the next year trying to hang on to his political life or trying to advance the issues he ran on? Are those two mutually exclusive?
2. Any progress on transportation? Are the Purple Line and Red Line proceeding smoothly through the federal funding process? Have lawsuits begun? Is anyone driving on the ICC, Segment A (I-270/I-370 to MD 97) of which should open in 2010? Is Bethesda getting its fair share of the recently passed $300 million for BRAC (to be split with Fairfax County)?
3. Is Ike Leggett doing anything on Policy Area Mobility Review (PAMR)? The County Executive dodged serious growth policy discussions this year by punting on PAMR. His recommendations are due to the Council by the end of March of 2010 and could lead to a reopening of the growth policy. My bet is the recommendations will be stuck in a drawer until 2011 when the biennial policy is to be reviewed anyway.
Imagine that you bring an item marked at $100 up to a store counter. The cashier takes your credit card, rings it up and says, “That will be $200.” Surprised, you ask, “What happened to the price?” The cashier replies, “We had a last-minute adjustment and since I am holding your credit card, I know you will pay for it.”
What was that? You say that has never happened to you? But it will, dear reader, as soon as you drive on the ICC. Recently approved toll rates for the ICC are among the highest in the country, maxing out at 25-35 cents per mile during peak hours. Those rates are higher than stated by the 2006 Final Environmental Impact Statement (FEIS), which assumed a baseline peak rate of 17 cents per mile and did not study any peak rates above 25 cents. Seven state legislators, most of whom ran on anti-ICC platforms in 2006, picked up on that fact and asked the Maryland Transportation Authority (MdTA) to extend the comment period, but to no avail.
Why did the peak toll rate double in three years? It’s not because the project cost doubled. When contract costs increased a year ago, the state reacted by indefinitely postponing service road work near I-95. That kept the project on budget. Instead, the state is relying on a consultant’s report stating that the high tolls will result in “near maximum toll revenue potential.” That’s a change in course from the FEIS, which acknowledged the need to raise money but stated that in setting tolls “consideration would also be given to the desire to maximize use of the ICC so as to decrease traffic on alternative routes.”
Perhaps even worse than the tolls themselves is all the political demagoguery surrounding them. It is one thing for anti-ICC politicians like Council Member Phil Andrews to criticize the tolls. Andrews has opposed the ICC for many years on multiple grounds and his slamming of the tolls is perfectly consistent with his past positions. But the entire County Council, which has several ICC supporters, opposes the tolls too. Nancy Floreen, perhaps the county’s biggest ICC backer, calls the tolls “highway robbery.” We are not inclined to give ICC-boosting politicians a pass on the tolls. How can a politician be pro-ICC and anti-toll when it has been known since at least 1997 that the multi-billion dollar project would be financed with tolls? And is it really a surprise that a very expensive road project paid for by tolls would charge very high tolls?
Then there are state legislators like House Majority Leader Kumar Barve (D-17) and former Delegate Cheryl Kagan (D-17), who backed the ICC but now protest the tolls. Both of them were in office in 1997, when Delegates Dana Dembrow (D-20), Henry Heller (D-19), Adrienne Mandel (D-19), Patricia Faulkner (R-14B) and Raymond Beck (R-39) introduced a local bill prohibiting the ICC from becoming a toll road without the permission of the county’s state legislators. That bill would have given the delegation leverage to block onerous tolls. But neither Barve nor Kagan supported it and the bill died. Now both of them are shocked, shocked by the tolls! Other current state legislators who were in office at the time but did not co-sponsor this bill include Senators Brian Frosh (D-16) and Jennie Forehand (D-17) and Delegate Sheila Hixson (D-20).
Finally, all of these politicians are missing a key point. MdTA has sole authority to set toll rates. It does not answer to the General Assembly and does whatever it wants. It unilaterally decided to charge fees for E-ZPasses last winter, claims it is not subject to state laws like the Public Information Act and now ignores its own FEIS by doubling the peak toll rate. While the politicians are quick to condemn the tolls, none of them present a plan to make this agency accountable to the public.
And what are the results of the agency’s unaccountability? MdTA’s rationale for high tolls is that they are needed to avoid diverting lots of toll revenue from the rest of the state and/or Transportation Trust Fund money to pay off the ICC’s bonds. But the ICC tolls that they have approved are so unreasonably high that drivers may avoid the road altogether. Then MdTA would have to jack up tolls from the rest of the state or seek trust fund money to pay the bonds – which is exactly what they say they are trying to avoid. And the General Assembly has little power to review their actions or stop them.
The content on this blog reflects the views of the individual writers and not any employers, organizations or other groups with which they may be affiliated unless otherwise stated.
