For General Assembly fiscal leaders, it's easy to fall victim to tunnel vision.
When the legislature gathers in Annapolis each January, there is only one bill it absolutely has to pass: the budget. And according to the Maryland Constitution, the budget for what is known as the general fund must be balanced.
But the general fund budget doesn't account for all the state's needs. One of the state's most important functions — building and maintaining a system of roads, transit, port facilities and airports that can help Marylanders compete in the world economy — is financed out of another honey pot of money called the Transportation Trust Fund.
And like Winnie-the-Pooh, legislators are on the verge of getting their head stuck in the pot.
You see, nothing in the Constitution requires the transportation fund to be balanced. There's no minimum level at which it must be funded. And there's nothing in the Constitution to prevent legislators from dipping into revenues that are traditionally reserved for transportation to make up for shortfalls in the general fund.
So when the budget is out of whack — as it is to the tune of about $1.6 billion this January — that pool of transportation money tends to glimmer like a mountain spring to thirsty legislators. Regularly, with the connivance of governors of both parties, lawmakers have dipped into that reservoir to borrow the money to solve what seems to be the more pressing issue of balancing the budget.
Each time that happens state leaders break an implicit promise to taxpayers that they will use certain money — particularly revenues generated from vehicle-related taxes and fees — to give them decent roads and transit.
That harms transportation because, absent such raids, it enjoys broader support than most state spending. After all, even conservative business leaders recognize a need to keep the veins and arteries of commerce flowing. The Greater Baltimore Committee and Greater Washington Board of Trade are two of the most vocal proponents of beefing up the trust fund — even if it takes a gas tax increase to do so.
Keeping that money in a separate pot doesn't make it easy to raise transportation revenue. The state gas tax, for instance, has remained at 23.5 cents per gallon since 1992 — losing more than half its purchasing power in the subsequent two decades. What was once a bipartisan consensus that it needs to be raised periodically has collapsed.
But legislators have mustered the will to periodically replenish the fund in recent years. In 2004, under Gov. Robert L. Ehrlich Jr., they almost doubled the vehicle registration fee. In 2007, under Gov. Martin O'Malley, they increased the titling tax and dedicated a percentage of sales tax revenue to the trust fund.
Then, the next year, they "temporarily" took back part of that sales tax revenue to let them abolish a much-loathed computer services tax. It seemed like a good idea at the time, but it's put Assembly leaders in a box this year.
Fiscal leaders are contemplating making that takeback of sales tax revenue permanent — at a cost to the already depleted fund of roughly $200 million a year.
Meanwhile, such leaders as Del. Sheila Hixson, chairwoman of the Ways and Means Committee, appear to be openly salivating at the prospect of using a gas tax increase to backfill that new gap and perhaps even finance a new raid on the honey pot. Under that scenario, the trust fund would be lucky to gain a paltry $100 million — about one-sixth what it really needs — from a 10-cent increase.
With other sources so recently tapped, the gas tax is the logical place to go to meet the state's transportation needs. But when you raise the gas tax just to make up for another funding stream that's been diverted from transportation, that's entirely too transparent a dodge. And when you increase it even more just so legislators can siphon off money for the general fund, that further imperils an already shaky consensus that transportation funding is a necessary evil. It certainly hands those who are determined to vote against all tax increases a hard-to-refute argument that raising gas taxes just fuels the general growth of government.
Sensing the growing pressures for a trust fund raid, a blue ribbon commission that is charged with making recommendations for financing transportation will make its recommendations this year instead of waiting for 2012. Good move — the cupboard could be bare by then.
One of the likely recommendations is to require a legislative supermajority for there to be further raids on the transportation honey pot. Some members seem to think that could be done by statute. But it would more likely take a constitutional amendment — a measure the Assembly's fiscal leaders have buried many times before because it reduces their flexibility.
Lawmakers can't be faulted too much for wanting to protect such priorities as education and health. But short-term fixes that undermine long-term support for transportation threaten the state's economic future. The state's road congestion is among the nation's worst. Already, two years of cuts in funding to local governments for highways have led to a bumper crop of potholes.
Far be it from me to speak for Maryland business. Or, for that matter, construction unions, engineers, highway builders and transit advocates. But if I were in their shoes, I'd resist any deal that could weaken long-term support for transportation. Raising the gas tax would be difficult with a coalition of those groups fighting it.
It took a constitutional amendment to finally break the slots impasse in 2007. Maybe history will repeat itself in 2011. Something must be done to restore trust to the Transportation Trust Fund.