Commission offers increased fees, tolls as options to the legislature

A blue-ribbon transportation panel will ask lawmakers to consider bolstering the state’s flagging Transportation Trust Fund by raising tolls and imposing new or increased vehicle registration fees.

The 31-member Transportation Revenue and Infrastructure Committee’s interim report is more of a menu of options for lawmakers to consider than a series of prescriptions.

“We’ve covered a lot of territory in a period of time,” said Frank Principe, who chairs the commission. “We also understand there’s a lot more to dig into and I don’t take that lightly. We certainly want to provide as much helpful input that we can in terms of trying to move these kinds of topics and conversations forward.”

The recommendations come as county leaders and lawmakers come to grips with recent announcements of draconian cuts to the state’s transportation budget. None of the recommendations will close the gap of billions of dollars in cuts or the shortfall already projected in the current rolling six-year Consolidated Transportation Plan.

The commission met four times this year before Wednesday’s work on interim recommendations.

In recent weeks, the Maryland Department of Transportation announced $3.3 billion in cuts. The reductions cut across all agencies within the department and affect some of the most important projects in all 24 major political subdivisions in the state.

Senate Budget and Taxation Chair Guy Guzzone (D-Howard) said it is unrealistic for the legislature to return in January to bridge the chasm in the transportation budget.

“This isn’t even close to the full menu of options,” Guzzone said of the interim report that legislators will receive next month.

“I think what is realistic is that we’re going to look at these recommendations,” said Guzzone. “We’re going to see what needs to be done to keep the system performing at a good level.”

That will require some prioritization, he said.

“I mean, if you’ve got a $3 billion problem and you can’t handle it all, you do have to think about what’s most important, what is the most critical,” said Guzzone. “Absolutely it’s triage.”

Part of that triage could mean temporary delays in getting major transportation projects off the ground. Some of those delays could impact the proposed widening of the Capital Beltway and I-270, a new American Legion Bridge, and the resurrected Red Line light rail project in Baltimore, said Guzzone.

The commission, created earlier this year by the legislature, is tasked with reimagining how transportation projects are prioritized and paid for in Maryland.

Projects are paid for through dedicated revenues to the Transportation Trust Fund.

Revenue flowing into the fund no longer keeps pace with the volume or costs of projects.

The gas tax, now 47-cents per gallon, makes up nearly a quarter of the Transportation Trust fund revenue.

The state’s gas tax, a key component of the fund, is becoming less relevant as gas sales decrease due to more fuel-efficient cars, increased working from home, and moves toward electric and hybrid vehicles.

The fund is also hobbled by the increase in electric vehicles which do not contribute in the same way as owners of gas-powered vehicles.

Additionally, the state is collecting less in new vehicle taxes as drivers in Maryland keep their vehicles longer.

Topping the list are calls to impose new vehicle registration fees on electric and hybrid vehicles which contribute little to the trust fund. The panel recommended the legislature look at increased vehicle registration fees for all vehicles.

The commission did not recommend a specific target for the fees.

Earlier this year, state transportation officials said the fee for electric vehicle owners in Maryland should be about $220, higher than the national average of about $128. Some expressed concerns that a fee that is set too high would disincentivize purchases of the vehicles as the state looks to move away from gas powered vehicles over the next decade.

The panel also approved a recommendation to calling for toll increases — possibly only on E-ZPass accounts not registered in the state.

Toll revenue by law is earmarked to repay bonds for toll facility projects. The commission called on the General Assembly to consider changes to the law to allow revenue over and above what is necessary to repay the loans to be used for other projects including transit.

Both proposals are fraught with potential Constitutional entanglements, according to Senate Minority Leader Stephen S. Hershey Jr. (R-Upper Shore).

Tolls imposed on only out-of-state drivers could run afoul of the Dormant Commerce Clause. A similar plan in Rhode Island faces a federal challenge. Members of the commission in Maryland hope to thread the needle by imposing higher assessments on E-ZPass automated tolling accounts that are registered in other states.

“We have seen other states not be able to do the same thing,” said Hershey. “All of a sudden we’re recommending it. To put forth a recommendation that will probably be challenged in court as a means of trying to solve this problem, I don’t think that was appropriate.”

Additionally, there are concerns that siphoning off money from a currently dedicated fund within the Maryland Transportation Authority could trigger bond rating downgrades or court challenges.

“I think that there are some significant hurdles,” said Guzzone, who added that lawmakers will discuss all options in the coming session before ruling anything out.

The commission also recommended that the Maryland Department of Transportation develop a new process for prioritizing transportation projects around the state.

County leaders and legislators have complained for years that the current process is byzantine and cloaked in secrecy.

A new Consolidated Transportation Plan process should consider factors including tying decisions to long-range transportation goals and considering the unique needs or urban and rural counties and separately score roads and bridges, transit, and aviation.

The commission also recommended that transportation officials “always present a balanced draft” of the Consolidated Transportation Plan prior to meeting with county leaders across the state each fall.

The final recommendation was a nod to frustrations expressed by county leaders and lawmakers after the department delivered a six-year plan in which the cost of projects outstripped the agency’s ability to pay for them to the tune of $2.1 billion.

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