Report from Annapolis – Report 6

In the General Assembly this week, the Senate has introduced 15 new bills for a total of 992 and the House added 36 new bills for a total of 1465.  Because the technical deadline for introduction passed a couple weeks ago, there were not that many new ones.  The trick now is getting all of them scheduled for a hearing, and some will not be heard at all.  MACo’s Legislative Committee considered 21 new bills this week.  But this week I am focusing on just one, our #1 initiative, restoration of Highway User Revenues (HUR).

There are three separate bills that address HUR and a fourth that addresses provisions for use of unanticipated ARPA federal funds.  There are four opportunities to get this done and differences in each proposal.  To remind you of the history of our transportation funding problem, back during the recession in 2009, there was a major decline in revenues and the State cut local funding by 90%.  The split used to be 70% to the State and 30% to the local governments, including the 23 counties (15.3%), Baltimore City (12.1%), and municipal governments (2.6%).  

It took nearly ten years, but the locals finally got a partial and temporary fix in 2018.  However, the county share only increased from 1.5% to 3.2%, which is nowhere near what we used to receive from the State.  Additionally, the increase was only for five years and is set to expire in 2024.  Remember these are your gas tax dollars that everyone in each county must pay at the pump.  It is proper for those dollars to be returned to the locals where we must repair and maintain thousands of miles of roadways.  This is our “vehicle” to pay for it.

The first bill HB410 / SB400 was introduced by the Administration.  It has good intentions and does recognize that by removing the sunset provision, we would not end up back to only 1.5%.  It makes the percentage permanent, but it is not restoration, which the local governments desperately are in need of.  It also requires reports of projects that we didn’t do.  Just because we didn’t receive the highway funds, doesn’t mean that we didn’t do the projects.  It just means that we had to use general revenue dollars from income and property taxes to pay for them.  It is much more appropriate to use gas tax money to pay for road projects.

The items required for the report are good ones to be aware of.  Showing actual costs and the current budget year expenses, along with identifying the specific projects that are eligible for use of these funds are all fine, but we already do this at the local level.  Showing a real number for the amount of funds diverted from the general fund to pay for them is a great idea and a useful tool for us to have, but to require the county to submit those reports to SHA, in order to receive our funds, is an extra layer that has never been required.  Local governments do a good job budgeting and prioritizing our projects and this seems an unnecessary step.

SB 946 – “Transportation – Highway User Revenues – Distribution” does reset the percentage higher than what is current, which is good, but counties would still only receive 10%.  Additionally, it disproportionately appropriates more to municipalities, who are already a lot closer to full restoration than we are.  The percentage still doesn’t make the counties whole and doesn’t get us back to the original 15.3%.  It would however, provide for some flexibility and we could use some of the funds for projects such as pedestrian walkways.  

HB1187 / SB726 – “Transportation – Highway User Revenues – Revenue and Distribution” is the MACo bill!  Restoring these revenues has been a priority almost every year since 2009 when the State severely cut the local share.  Specifically, County governments were cut to 1.5% and we are partially restored to 3.2%.  With this bill, the counties would finally be made whole and receive our previous share of 15.3%.

We have heard from leadership that it is difficult to commit to ongoing funding and that there are state road projects that wouldn’t get done.  But a road is a road is a road.  The citizens don’t know if it is a city road, a county road, a state road or a federal road, they just want it fixed.  All projects are important and the funds need to be divided equitably.  The current division is not, and the funds should never have been diverted back in 2009.  Yes, State revenues took a big hit in the economic downturn, but so did our county dollars!  This is about fairness and now it is time to fix it.  

HB 1322 – “Operating Budget – Consolidated Transportation Program and Unanticipated Federal Funds.”  This may actually be the main avenue to get full restoration of our Highway User Revenues.  As everyone is aware, during the past two years of Covid, there has been a large influx of federal dollars to help the economy in various ways.  There was the CARES Act and ARPA and there are guidelines for their use.  This bill provides the guardrails for use of the ARPA funds and requires the “Consolidated Transportation Program to include a reserve of $35 million for changes in revenue sources for each fiscal year included in the financial forecast.”

This would be a good place to “find” the revenues to help support restoring the funds to local government.  We are not asking for an additional percentage of money beyond what we used to receive.  This influx of unanticipated revenue for projects is a reasonable and appropriate use of these dollars.  

Hearings for all of these bills take place March 8 – 10 in the various committees.  All information is posted on the Maryland General Assembly (MGA) website.  Please consider lending your voice and testifying in person or writing a letter of support.  Please share this information, so that our elected officials understand the differences in these three bills.  All have a good intent and recognize the problem, but the MACo bill is the only one that fully restores us back to where we used to be.  

Let’s use roads money for roads projects and not divert general tax revenues.  Let’s keep them in place to support our schools, public safety and all the other general government services that we need to provide to you, our citizens. 

Laura Everngam-Price is President of the Executive Board of Directors of Maryland Association of Counties, former chair and current member of Budget and Tax, member of MACo’s Initiative subcommittee, Talbot’s legislative liaison and member of the Talbot County Council.