"Our over-reliance on cars and $4-per-gallon gasoline has led us to dig a really deep hole for ourselves. The Purple Line is the ladder that helps us climb up out of this hole toward the light of rational land use, friendly commutes and a stable climate." Mike Tidwell, director of CCAN

Legislative Report on Transit Coalition to Build the Inner Purple Line Updated: April 22, 2007 Greater attention was placed on transportation revenues this legislative session, with Senate President Thomas V. (Mike) Miller, House Ways and Means Chairman Sheila Hixson and others introducing legislation to increase funds for transit and road projects. In his State of the State address, Governor Martin O’Malley acknowledged that new revenues would be needed to keep up with the public’s expectations for transportation improvements. However, state leaders opted to delay action on all major fiscal issues this session. Transportation Funding Needs More information came to light about state transportation funding needs. Early on in the session, MDOT submitted a Transit Funding Study which had been required by legislation passed in the 2006 session. This was mandated largely in reaction to the proposed federal legislation to create dedicated funding for Maryland. In addition to examining responses to the Congressional proposal, the legislature required MDOT to conduct a statewide assessment of transit funding needs, looking at WMATA, local and Commuter bus systems, MARC and core MTA services and New Start expansion projects. See: MDOT Transit Funding Study During the session, the legislature’s budget committees widened their focus from transit to the funding needs of entire Department of Transportation. Its statewide, multi-modal Transportation Trust Fund (TTF) supports the capital and operating needs of the state’s transit, highway, port, airport and motor vehicle administrations, along with Maryland’s share of WMATA’s subsidies. The Transportation Trust Fund is strained. Most TTF revenues do not keep pace with inflation. Moreover, increases in construction costs have exceeded inflation. This squeezes out the state’s ability to fund new capital projects across the state. At the request of members of the legislature’s budget committees, MDOT reviewed the unfunded needs in the TTF identified by the Hellman Commission in a 2000 report, looking at transportation needs of all the transportation modes within the Department over a 20 year period. This shortfall, when taking into account inflation, has increased from $27 billion to $40 billion, according to MDOT. The Department also cautions that this does not include transit New Start projects and may under-estimate highway maintenance needs. In a letter to the budget committees, Secretary Porcari indicated there was a shortfall of $400-600 million annually to keep pace with previously identified capital needs. Transportation Revenue Legislation Considered Several bills were introduced in the House and Senate to increase transportation revenues. The Senate focused on the gas tax; Senate President Miller introduced a bill which would have raised the gas tax by 12 cents a gallon, with a indexing mechanism to increase it in future years. The House Ways and Means Committee considered both traditional transportation revenues – the gas tax and vehicle excise tax – along with the sales tax. Last session, there was emphasis on dedicated funding for transit, with proposals to create transit accounts within the TTF. This was intended to comply with the proposed Congressional Metro dedicated funding legislation, which would have authorized $1.5 billion in new federal funds for Metro if it was matched with dedicated funds from the regional governments. Three bills introduced this year included similar provisions, though several legislators indicated that would support elimination of the transit account if it isn’t required under the federal legislation. MDOT believes the transit accounts are not needed, under the current Congressional language. No revenue bills were advanced, given the preference of legislative leadership and the O’Malley administration to defer action on fiscal issues this year. SB 167 – Transportation Funding – Mass Transit Account (Senator Kramer). Would have diverted ¼ of a penny of the existing 5-cent sales tax to transit. Senator Kramer stated that she introduced this bill for discussion purposes to keep attention focused on transit funding needs. It would have diverted $200 million to the trust fund from the General Fund. It was rejected in committee. SB 949 - Transportation Funding Act of 2007 (Senator Miller). This would have raised the gas tax by 12 cents, with a complex indexing mechanism to provide automatic increases in the future, intended to compensate for inflation. (The gas tax would have been increased semi-annually based on 4% of the average whole cost of gasoline. The annual adjustments would be capped at 1 cent per gallon a year) This would have raised $406 million a year. No vote was taken. HB 434 - Transportation Funding - Mass Transit Funding - Sales and Use Tax (Delegate Barkley). This would have raised the sales tax from 5 to 5.5% with all additional revenues going to a transit account within the TTF, an estimated $390 million per year. The Ways and Means Committee gave an unfavorable report. HB 393 Sales and Use Tax Rates – Mass Transit Funding (Ways and Means Chairman Sheila Hixson). This would increase the sales tax from 5 to 6%, with half of the additional revenue going to a transit account within the TTF, raising about $380 million per year. No vote was taken. HB 761 Vehicle Excise Tax Rate (Chairman Hixson) This would have increased the motor vehicle excise tax from 5 to 6%, raising approximately $145 million a year. (A concept that might be considered if the sales tax is increased from 5 to 6% as well.) No vote was taken. HB 821– Transportation Tax Revenues (Chairman Hixson) This would have increased the gas tax by 10 cents per gallon and applied the state’s 5% sales tax to the wholesale price of gasoline. This would have raised $770 million a year, a growing, but potentially fluctuating source. No vote was taken. Comprehensive Needs Assessment Required The legislature required MDOT – through budget language – to provide more detailed information to the budget committees about transportation funding needs.

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