Gov. Lawrence J. Hogan Jr. (R) will ask the state’s Board of Public Works this week to approve a $250 million settlement with Purple Line Transit Partners, the collection of firms building a 16-mile light rail line in Prince George’s and Montgomery counties.
Hogan’s request, posted Friday on the board’s website, would draw the payment from the state’s beleaguered Transportation Trust Fund, further reducing Maryland’s ability to expand and maintain its road and transit network.
If approved, as expected, the payment would resolve a lengthy contract dispute that led PLTP’s main subcontractor, Purple Line Transit Constructors, to quit the massive and high-profile project in September, bringing work to a halt.
The consortium said that delays triggered by citizens’ lawsuits, design issues and permitting problems caused it to rack up $800 million in uncompensated expenses. After months of negotiations, the state and PLTP agreed to end their dueling lawsuits in exchange for the $250 million settlement that the public works panel will consider on Wednesday.
Given the urgent need to get the $5.6 billion project back on track, Hogan had little choice but to tap the state’s transportation fund, observers said on Friday.
“The state had to do what it’s doing,” said John B. Townsend II, director of government and public affairs for AAA Mid-Atlantic.
The Purple Line “had to be rescued and the state had to be the rescuer of last resort,” he added.
The decision to raid the Transportation Trust Fund doesn’t sit well with members of the legislature from other parts of the state, but none were willing to criticize Hogan’s move on the record, as they were reluctant to appear unsupportive of the project or the jurisdictions it will serve.
The TTF is funded by the state’s gas tax, public transit fares and fees charged by the Motor Vehicle Administration.
The fund is under significant strain due to a variety of factors, including improved vehicle gas mileage, the increasing use of hybrid and plug-in vehicles, a drop in the number of vehicle miles travelled, and a reduction in bus and subway use.
A 2019 report demanded by the General Assembly found the state lacks the $2 billion it needs simply to maintain the transit equipment it already has — and that was before the COVID-19 crisis sent revenues plummeting.
Brian O’Malley, head of the Central Maryland Transportation Alliance, said he supports the Purple Line settlement. But he said it’s imperative that funding for the Maryland Transit Administration, which serves the Baltimore area, be increased.
“The MTA is badly underfunded,” he said. “We should put a halt on any expansions of things and take care of our core maintenance and system preservation needs first.”
In a statement to Maryland Matters on Friday, U.S. Rep. Anthony G. Brown (D-Md.) said Hogan “bears full responsibility” for the contract impasse that led PLTC to quit the project.
“Governor Hogan’s mismanagement of the Purple Line Project has been costly and embarrassing for our state,” said Brown, who lost to Hogan in the 2014 gubernatorial election. “His failure has left streets in our communities torn up, broken promises and now imperils roads and transit projects in Baltimore and across Maryland. In raiding our state’s Transportation Trust Fund, Governor Hogan is using taxpayer money to cover-up his missteps and threatening our economic future.”
The state entered into a public-private partnership with PLTP in 2016, making it the largest “P3” transit project in the country.
Hogan’s proposal to replace the American Legion Bridge and widen portions of the Capital Beltway (I-495) and Interstate 270 also envisions use of the state’s P3 law. In 2021 the state is expected to enter a Project Development Agreement with a consortium of private firms to build express toll lanes, which would be funded by variable tolls set by the contractors.
Townsend said MDOT had to resolve the Purple Line dispute to end the legal wrangling that has tarnished the image of such projects.
“With the express lanes coming online next, the state could not show that it was inept,” he said.