A Bridge to Cross in Maryland: Transportation Funding

Last week's announcement that Gov. Martin O'Malley (D) will consider raising transportation revenue -- including increasing the gas tax -- is an acknowledgment that transportation is part of Maryland's fiscal crisis. Until recently, debate has focused on the state's looming general fund deficit, with little discussion of the growing transportation funding shortfall.

The general fund's problems are clear. Expenses are expected to exceed revenue by $1.5 billion in fiscal 2009. Many attribute this to the state's 2002 decision to increase education funding for kindergarten through high school by $1.4 billion over seven years, under what is known as the Thornton Plan. Politically popular, that plan has been supported by three successive governors and the legislature. There has never been a way to pay for it. In fact, it came on the heels of an income tax cut. Too often, it seems, politics has come before fiscal responsibility. Now the bill has come due.

During this spring's legislative session, O'Malley urged legislative leaders to defer action on taxes, allowing him time to find budget savings and efficiencies. There is talk of addressing the fiscal crisis in a special session this fall or in January. Whenever the legislature reconvenes, transportation is a key issue that must be addressed.

Why? Because of fiscal problems, Maryland will not be able to fund new projects. This will stall efforts to relieve congestion and maintain our quality of life and economy. Costs have grown faster than Maryland's transportation trust fund revenue has. A major revenue source -- the gas tax -- has not kept pace with inflation and has not been adjusted in 16 years. Drivers pay the same tax today for $2.99-per-gallon gas as they did in 1992, when gas sold for $1.07 per gallon.

Also, construction costs have increased much faster than the rate of inflation. The cost of highway construction materials increased 31 percent in a recent two-year period. The $27 billion in unfunded priority projects identified in a 2000 statewide study will now cost an estimated $40 billion, in part because of inflation.

To meet these basic transportation needs, new annual revenue of $400 million to $600 million is needed, according to the Maryland Department of Transportation. Fortunately, some important projects are funded and moving ahead, including the Woodrow Wilson Bridge and the intercounty connector. But much more must be done, including key interchange and highway improvements and transit projects such as the Purple Line.

Maryland must also be prepared to pay its share of the match in proposed federal Metro funding legislation that is advancing in Congress. This critical legislation would leverage as much as $3 billion for the system over 10 years. Virginia and the District of Columbia have passed legislation to provide a match of $50 million per year each. Maryland will need new revenue to meet its commitment.

To address this transportation crisis, the gas tax is one of several options that should be kept on the table. To come up with the $400 million to $600 million, a package of revenue sources probably will be the best approach.

Without an infusion of revenue, Maryland's transportation capital budget will shrink, and drivers can look forward to worsening gridlock. Business leaders understand the impact on our $313 billion regional economy. Congestion costs our region lost time, an estimated 87.5 million gallons of wasted gas annually, and unnecessary injuries and deaths because of unsafe traffic conditions.

To keep our region and our economy moving forward, Maryland's fiscal fix must include transportation funding.

-- James C. Dinegar

Washington

The writer is president and chief executive of the Greater Washington Board of Trade . His e-mail address isjimdinegar@bot.org.