Steep increase in Maryland tolls proposed

Users of Maryland toll facilities face what could be the most dramatic across-the-board increases in the state's history under a plan being developed by the Maryland Transportation Authority.

The proposed tolls are part of a four-year package of $210 million in increases that would put some of the fattest sacred cows in Maryland's transportation system on the chopping block — increasing Bay Bridge tolls, which have remained frozen since 1975, to $5 this year and $8 in 2013, and commuter rates that haven't been touched in 22 years.

The magnitude of the proposed increases comes as no surprise to political insiders and people who closely track Maryland's transportation system, but their scale is likely to be a rude jolt to state residents who would have to dig deeper into their pockets to use the Baltimore Harbor crossings, the Bay Bridge, the John F. Kennedy Memorial Highway and other toll facilities.

The numbers were outlined by the professional staff of the authority at a meeting Thursday of its Finance Committee. The proposals are not binding, but they represent the first specific ideas put on the table for this year and the next round of increases in 2013. The proposal will now go to the full board, which plans to take three weeks to consider it before meeting in early June.

Under the proposal outlined for the Finance Committee of the authority's board, the increases would come in two phases: one on Oct. 1 of this year and the other on July 1, 2013.

Occasional users of the harbor crossings — the Fort McHenry and Harbor tunnels and the Key Bridge — now pay $2 each way. Under the plan outlined by the authority staff, they would pay $3 in October and $4 in mid-2013.

Commuters using those crossings, whose rates have been frozen since 1989, now enjoy a discount that lets them use the facilities for 80 cents a day for a round trip. Under the plan the board is expected to consider in June, that toll would rise to $1.80 for a round trip this year, followed by a jump to $2.80 in two years.

Unlike the past several occasions on which the authority has raised tolls, the Bay Bridge would not be spared this time. The current toll, $2.50 on eastbound trips only, is less than the $2.80 charged for a round trip when the first span of the bridge opened in 1952. Under the plan released Thursday, the toll would jump to $5 this year and $8 in 2013. Commuter rates would increase to $1.50 in the first phase and $2.80 in the second.

On the John F. Kennedy Memorial Highway, the portion of Interstate 95 northeast of Baltimore, the toll would rise from $5 to $6 later this year and to $8 in 2013. Commuters on the highway, where drivers pay northbound tolls only, would see an increase from 80 cents a trip to $1.80 next year and $2.80 in two years.

Users of the Hatem Bridge on U.S. 40 over the Susquehanna River would pay the same basic cash rate as motorists on the parallel Kennedy Highway. But commuters on the Hatem Bridge face the likely abolition of the current decal system that lets them cross for a full year at a flat $10 rate. Those users would have to use E-ZPass to get a discounted rate, which would go up to $36 a year plus a $1.50-a-month E-ZPass fee.

The final plan could include a sweetener for E-ZPass users. Board members directed the staff to provide them a cost estimate for giving pass users a 10 percent break on tolls — an incentive to switch to a system that saves on collection costs.

In their size and breadth, the increases would be the most sweeping since the state opened its first modern toll facilities in 1940.

Maryland Transportation Secretary Beverley K. Swaim-Staley, who chairs the board, said toll increases are unavoidable because of the need to pay bondholders for existing debts and the growing maintenance demands of aging bridges, tunnels and roads.

"They are at an age where they need major rehabilitation, and we need to pay for that rehabilitation," Swaim-Staley said.

But the state Senate's leading critic of the authority denounced the proposed increases as "outrageous" at a time when Marylanders are trying to cope with near-record gas prices.

"It just shows how out of touch the O'Malley administration is with the average working family," said state Sen. E.J. Pipkin, a Republican from the upper Eastern Shore. "Do you think the average family income in Maryland has gone up 300 percent?"

A leading expert on toll facilities said the proposed increases are steep because they are making up for years in which the state's tolls lagged behind national trends. Peter Samuel, editor of Frederick-based Toll Road News, said the package would take Maryland tolls to levels consistent with national trends. He pointed out that Maryland has gone since 2003 without increasing its base-rate tolls for passenger vehicles.

"I think it's been a long time coming. I don't think it's necessarily excessive," he said. "I personally think they should have bitten the bullet two, three, four years ago."

For several years now, the transportation authority and legislative analysts have warned General Assembly committees that sizable toll increases would be coming in 2011 and 2013. Among the factors driving the increases are the heavy debt burden the state shouldered to build the $2.6 billion Intercounty Connector in the Washington suburbs and the nearly $1 billion Express Toll Lanes on I-95 from Baltimore to White Marsh, as well as the growing maintenance cost of facilities that are in many cases more than 40 years old.

In a sense, the board chose to take its lumps at one time by directing the staff to prepare a four-year plan encompassing two rounds of increases. The first round, in October, is expected to raise roughly $88 million.

The details of the toll package outlined by the authority's staff are not graven in stone. Swaim-Staley said that any increases approved by the board will be the subject of nine public hearings, starting in June, which will allow the board to make adjustments in response to public concerns.

But Swaim-Staley said the overall size of the toll increase is effectively immutable because the consequences of failing to raise enough money to meet the system's obligations would be severe. She said a failure to act could result in a default, which would cost the authority its top-tier AA bond rating and escalate the cost of future borrowing.

The result would be "to let our facilities degrade beyond the point where they are functional and safe," she said.

Local economist Anirban Basu said higher tolls could affect where businesses locate. Basu, head of the Sage Policy Group, said companies might choose to locate in areas that are not near tolls — potentially hurting such regions as the Eastern Shore.

"No one likes to see this happen," Basu said. "No one likes to see costs rise. This will not be popular, but it is unfortunately a taste of things to come. Government-run services will become more pricey over the years because of the ongoing structural deficit issues at the state and local government levels."

One of the areas most heavily affected by the increases would be eastern Baltimore County, where many residents are frequent users of the harbor crossings and Kennedy Highway.

Baltimore County Councilman John Olszewski Sr., who represents the area, said officials need to discuss how to ease the financial burden on people who frequently use those facilities. But he said higher tolls may be needed.

"These are tough times, and we have aging infrastructure that needs to be improved," Olszewski said. He added that people who vacation on the Eastern Shore would likely pay a higher toll, even if they don't like it, because taking longer, alternate routes would cost more in gasoline.

Since its creation, the authority has been an independent entity that does not answer directly to the General Assembly and can raise tolls without legislative review.

Pipkin said that he had proposed legislation that would have curbed the authority's toll-raising powers but that it had been successfully opposed by the Maryland Department of Transportation. He said the proposed increases show why the authority's independence "should be questioned" and urged citizens to call the governor's office and the authority itself to protest the increases.

The senator suggested that much of the demand for money to pay bondholders came from the costs of building the Intercounty Connector, a partially opened toll road in the Washington suburbs. The $2.6 billion highway was proposed as a toll road under Republican Gov. Robert L. Ehrlich Jr. and continued in the same form under Democratic Gov. Martin O'Malley.

The ICC, conceived under Ehrlich as a road where tolls would vary by market demand and congestion levels, would not be affected by the current proposed increases. Authority officials said that its rates had only recently been adopted and that when the highway fully opens late this year or in early 2012, the tolls would fall within the range in which they were originally set.

Pipkin contended that users of the Bay Bridge and other facilities should not have to pay more to cover the costs of the new highway. "If the ICC threw the finances out of whack, they ought to address it through the ICC," he said.

It is not clear, however, whether buyers of the bonds that financed the ICC would agree to any move to separate its finances from other authority facilities. Under the law that governs the authority, its revenues are pooled so that facilities turning a profit support those that are still being built or in need of expensive repairs.

Samuel, the editor of Toll Road News, said a political "hue and cry" could prompt the authority to modify the proposed increases, but he warned that an overt attempt by elected officials to block the increase could have serious consequences.

"They might have a financial crisis. They might have trouble with the bonds they've issued and they might have to suspend some of their capital programs," he said. "If the legislature were to intervene to prevent it, there are legal problems with that too."

Baltimore Sun reporter Andrea K. Walker contributed to this article.

michael.dresser@baltsun.com

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