Md. scales back expectations for magnitude of toll increases

With collections from commercial truck traffic showing a modest rebound, the state is scaling back its projections of a long-expected toll increase.

The Maryland Transportation Authority is now expecting an average increase of base tolls in the neighborhood of 75 cents, according to acting Executive Secretary Harold Bartlett. Previous forecasts — made around the deepest point of the recession — had predicted an average rise of as much as $1.35.

Bartlett said the lower prediction is the result of a combination of increased toll revenue, cuts in the authority's operating budget and low interest rates that have reduced borrowing costs. And he said the final decision could be to go with an even lower amount.

"My belief is that amount will continue to go down," he said. "We continue to really hammer away at our operating budget."

The authority has been foreshadowing such an increase for several years in its communications with bond holders, rating agencies and the General Assembly's staff. In 2009, it outlined a "worst-case scenario" under which it would need an increase of about 45 percent on an average toll of $3.

Now, Bartlett said, it looks as if tolls will have to increase by about 25 percent. But that forecast is a long way from being a comprehensive proposal, which would have to come before the authority's board.

Under Maryland law, the board of the independent authority would have the final say on the size and details of any increase — but only after going through a public hearing and comment process. The General Assembly is typically consulted about proposed increases, but it has no formal role in the approval process.

It is unlikely that any increase would be a flat amount such as 75 cents on every toll. In the past, the authority has decided to raise tolls on some facilities but not others. The Bay Bridge, for instance, has been shielded from increases for decades even as tolls increased on facilities such as the Baltimore harbor crossings and the John F. Kennedy Memorial Highway (Interstate 95) northeast of Baltimore.

In recent decades, the authority has also been reluctant to pass along increases to its regular commuters, whose discounted toll plans have remained frozen even as base tolls for other users have increased.

Though Bartlett said the authority has cut back spending on basic operations, such as personnel, he said it is now faced with the capital costs of two "megaprojects" under construction — the Intercounty Connector in suburban Washington and the Express Toll Lane project on I-95 near Baltimore — in addition to growing demands for "system preservation" spending.

The authority chief noted that the portions of the I-95 corridor under its management largely consist of elevated structures that are about 50 years old and in need of more than routine resurfacing. Maryland is also facing a pressing need to shore up the foundations of two bridges over the Susquehanna River — the Tydings Bridge on I-95 and the Hatem Bridge on U.S. 40.

Some of these projects have been deferred in recent years as revenues plunged. But Bartlett said the authority had carefully chosen which work to put off.

"We've done nothing that sacrifices safety," he said.

Next in line could be another mega-project — the anticipated replacement of the 70-year-old, structurally obsolete U.S. 301 bridge over the Potomac River in Southern Maryland. Bartlett called that project, now in the planning stage with a potential $1 billion price tag, "a big nut to swallow." He said its costs are unlikely to be included in this round of toll increases. The authority has said another round of increases may be necessary in 2013-2014.

Bartlett said the authority's staff will bring a proposal for the current round to the board later this year — probably around summer. The public would have 60 days to comment, and the board could make revisions based on that feedback. Bartlett said the increase would likely go into effect sometime late in this calendar year.

The last round of increases in base tolls for passenger vehicles came in 2003 and fell heaviest on the Fort McHenry and Harbor tunnels, along with the Key Bridge, where they went from $1 to $2. In 2009, the authority raised tolls on trucks and imposed a fee on E-ZPass accounts but spared the family car.

In theory, the authority's board members act independently of the governor, who appoints them for a fixed term. In practice, the administration wields behind-the-scenes influence through the secretary of transportation, who heads the authority board. But political considerations have to be weighed against the demands of the bond market, which expects periodic toll increases and which can punish a toll authority that balks with higher borrowing costs.

In recent years, under the pressure of building the $2.6 billion ICC and the nearly $1 billion I-95 project, the authority has stepped up its reliance on borrowing — adding to the pressure for higher toll revenue.

The timing of that toll increase is weighing on the minds of legislators, who are also considering ways to shore up the state's Transportation Trust Fund.

The authority's financing, which comes from tolls, is generally separate from the fund — which pays for most state roads, transit, the port of Baltimore, state airports and other transportation needs. But some leading legislators, notably Sen. Rob Garagiola of Montgomery County, have expressed concern that the public would not understand any increase in other transportation taxes and fees at a time when tolls are rising too.

It was with that in mind that a blue-ribbon commission created by the legislature to recommend ways to finance transportation recently recommended that lawmakers take action this year — including perhaps raising the gasoline tax — to shore up the anemic trust fund.

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