Legislation would support an estimated 7,500 new jobs, includes “braking mechanism” for consumers and stronger protections for the Transportation Trust Fund
ANNAPOLIS, MD (February 14, 2012) – Governor Martin O’Malley today officially submitted to the General Assembly the Maryland Transportation Financing and Infrastructure Investment Act of 2012, a bill that seeks to address the State’s transportation infrastructure needs.
“To create jobs, a modern economy requires modern investments. This legislation will allow us to support 7,500 new jobs building needed roads, bridges, and public transit throughout our State,” said Governor O’Malley. “Maryland has some of the worst traffic in America, and with a growing population and aging infrastructure, we must address these needs today, so our children are not left with a failing transportation system tomorrow. If we are going to protect our recent progress and move our State forward, we have to be honest about the choices we face, and though it is a difficult choice to make, no one will do this for us, except for us.”
This bill works in conjunction with the Administration’s proposed FY 2013 budget, which supports 52,000 jobs alone in the capital budget—focusing on a balanced approach of reductions, revenues and investment to create jobs, innovate and rebuild Maryland’s infrastructure.
The proposed legislation phases in a six percent sales tax on motor fuel at two percent each year for three years that will generate an additional $613 million in revenue to address Maryland’s urgent transportation infrastructure needs and support an estimated 7,500 jobs for Maryland families. The sales tax would be applied to the retail price of motor fuel minus any federal and state taxes. An average retail price of motor fuel will be calculated by the Comptroller’s Office every six months based on the average of the prior six months of actual prices of regular unleaded gasoline.
The Governor’s legislation includes a “braking mechanism” that will temporarily cease the phasing of the tax for consumers in the event of a dramatic spike in the price of gasoline. If the price of gasoline in year one were to increase by more than 15 percent over the prior year, the rate in year two would remain at 2 percent. This test will be calculated in each subsequent year until the full rate of 6 percent can be applied.
Over the course of these recessionary times, local revenue funds have been reduced; this legislation restores transportation aid to local governments. When fully-phased in and combined with Highway User Revenues, the revenue generated from the application of the sales tax will restore both municipalities and Baltimore City to approximately 71 percent of their 2008 funding levels and will restore the Counties to nearly half (42 percent) of their 2008 funding level.
The bill also contains stronger protections for the Transportation Trust Fund, including automatic repayment of transfers from the Fund; using the Treasurer’s guidance on the potential impact of the State’s credit rating before transfers occur; and a repayment plan with specific payback provisions provided for in the bill if there is an emergency.
In accordance with the recommendation of the Blue Ribbon Commission on Transportation Funding, the bill also proposes the Regional Transit Financing Authority Study, which creates a workgroup to study and make recommendations on regional transit financing authorities to bring in additional funding to support major transit projects. Additionally, the proposal includes a two-dollar increase in the registration surcharge for the Maryland Emergency Medical Systems Operations Fund to support first responders and emergency medical services in the State.
The Governor added, “These challenges have no easy solutions but we do have the power to make better decisions today, decisions that in the long term will actually cost us less. But we can’t keep kicking the can down the road.”
To see the cost of putting off tomorrow what we can do today for Maryland’s infrastructure, click here.