State funding plan elusive for roads, transit

As the General Assembly nears the halfway point in its 90-day session, Gov. Martin O'Malley and key legislators have yet to agree on a plan to pay for new roads, bridges and transit lines — a decision many consider critical to Maryland's economy.

Business leaders and others are warning that a longstanding erosion of the fund that finances transportation projects is becoming a crisis. Without new money in the form of higher taxes and fees, they say, work on critically needed projects — including Baltimore's Red Line and suburban Washington's Purple Line — will come to a halt.

Already, road maintenance is being deferred, transportation officials say, and bus and train schedules could be cut back within the year. The money to continue planning the two transit projects runs out June 30. And business opportunities could be lost if the port can't do the dredging needed to keep shipping channels open.

"For the last six years we've been putting lipstick on a pig, and we're out of lipstick," said Leif Dormsjo, acting deputy secretary of transportation. "The basic reason is the costs have been going up, and there hasn't been any adjustment in the mechanism for raising revenue since 1992."

He was referring to Maryland's 23.5-cents-a-gallon gas tax, which hasn't increased since William Donald Schaefer was governor. Over the past two decades, the purchasing power of the money it generates has diminished, while improved gasoline mileage has held down sales. Meanwhile, lawmakers have become increasingly skittish about raising a tax that is especially unpopular.

For more than a year, O'Malley has been telling lawmakers the need for new revenue is urgent — that Maryland can't compete when its Washington suburbs have the nation's worst traffic congestion costs. Just this month, the highly respected Texas Transportation Institute again gave metropolitan Washington that dubious distinction. Among smaller urban areas, Baltimore was second worst.

Donald C. Fry, president of the Greater Baltimore Committee, said a revenue package is vital to the state's economic health.

"We're falling way behind as far as the needs of our infrastructure," he said. "There are major projects — both highway and transit — that need funding."

While the governor has been out front in defining the problem, this year he has held back on proposing specific solutions. So far, only Senate President Thomas V. Mike Miller Jr. has put a comprehensive program on the table — a package of proposed tax increases and fundamental changes in the way Maryland finances transportation.

O'Malley and House Speaker Michael E. Busch have praised Miller for offering a proposal, but so far have not said what they're willing to support. All three men are Democrats.

Miller's plan will get a public airing Wednesday when he presents his legislation at a hearing before the Senate Budget and Taxation Committee. The Senate president kept up his public pressure on the governor Tuesday, saying the Senate, House and governor have yet to reach a consensus.

"He should have had a bill introduced right now in the House and in the Senate," Miller told reporters. "He defined the problem in the State of the State, but he hasn't provided an answer yet."

Miller's proposal combines a relatively conventional revenue-raiser — a 3 percent sales tax on gasoline — with some ground-breaking departures from Maryland's traditional approach to transportation funding.

Among other things, Miller would give county governments and Baltimore the option of adding up to 5 cents a gallon to the state gas tax to pay for local transportation priorities — a significant transfer of responsibility and political risk to the local level.

Seeking an elusive consensus between urban and rural lawmakers, the Calvert County Democrat also has proposed the establishment of regional transit authorities in the Baltimore and Washington areas — with the power to impose their own taxes.

That revenue could be used to pay the state's share of the billions it will take to build the Red Line between Woodlawn and Bayview and the Purple Line between New Carrollton and Bethesda. Rural and outer suburban lawmakers have balked at any revenue-raising measures that involve their constituents paying for those projects.

Miller's legislation also calls for the state to study the possibility of a long-term lease of the Intercounty Connector to a private contractor that would collect the tolls. In return, the state would get an up-front payment that would presumably finance capital projects.

O'Malley has been outspoken about his preference for using the general sales tax rather than the gas tax as a vehicle for raising transportation funds. But while the governor has yet to embrace Miller's plan, neither has he ruled out any part of it.

Lt. Gov. Anthony G. Brown, appearing before Baltimore's House delegation Friday, called transportation funding the most challenging issue facing the administration this session. He explained why O'Malley has held off on submitting his own plan: He offered one last year, only to see it go nowhere.

"He didn't want to be like Charlie Brown holding the football," Brown said.

Brown expressed confidence that the governor and the Assembly's presiding officers would come together around a common plan. But he also conveyed the administration's misgivings about Miller's proposal to move away from Maryland's current funding model, in which residents of all jurisdictions pay the same taxes and fees for transportation.

"I do have concerns about Balkanizing our approach to funding transportation," Brown said.

Even without new revenue, Dormsjo said, some areas will be protected: bridge replacement, safety-related improvements and Baltimore-Washington International Thurgood Marshall Airport.

But he said that for the past two years, the State Highway Administration has for the first time fallen short of its target for repairing road surfaces. Meanwhile, he said, the Maryland Transit Administration could be looking at cutting back bus runs within the year.

As an example of the type of cuts that would have to be considered, Dormsjo mentioned the possibility of ending MARC train service between Baltimore and Perryville to save $5 million annually. Dredging of the port also would be affected, he said.

Perhaps the most consequential result of a failure to find additional revenue would be the shutdown of planning and engineering on the Red Line and Purple Line, which together carry a price tag of about $5 billion.

Henry Kay, the MTA's deputy director for planning, said that if the money runs out, the work that has been done so far — involving about 500 people and $120 million since 2000 on the Red Line alone — will be put into archives in the hope that the projects can someday be revived.

Fry warned the projects could lose their place in line for federal funding.

"You may be delaying these projects for as much as a decade if you're not ready to move forward," he said.

Not everybody thinks that would be a bad thing. Senate Minority Leader E. J. Pipkin, an Eastern Shore Republican, said the state already spends too much on mass transit. "Roads are getting squeezed out across the state," he said.

House Republicans held a news conference Tuesday at which they argued that instead of raising taxes on gas, the state should shift spending from transit to roads, raise bus and rail fares and shift money from the state's general fund to make up for the diversion of local highway funds in past years.

Aides to Miller, Busch and O'Malley say the three leaders' chiefs of staff are holding discussions. A spokeswoman for Busch said there may be new developments by late this week. While Miller keeps stressing that it's getting late in the session, others suggest there's still time to pass a bill once a consensus is reached.

"Everybody knows the needs," Busch said. "There seems to be a will to get it done."

This session is widely seen as the time to do it. Few expect senators and delegates to approve a revenue increase in 2014 — when they are up for re-election.

Baltimore Sun reporter Erin Cox contributed to this article.