Five-year, $3.4 billion investment projected to support 44,000 jobs
ANNAPOLIS, MD – Governor Martin O’Malley, Senate President Thomas V. Mike Miller, Jr. and House Speaker Michael E. Busch today unveiled a joint innovative, multi-faceted plan to increase investment in the State’s transportation system, relieve congestion, and create jobs. The plan raises an average of $800 million annually, and is projected to support more than 8,800 jobs each year over a five-year period. During that five-year period, the package will generate an additional $3.4 billion for Maryland highway and transit projects.
“Building a 21st Century transportation network won’t happen by itself. We cannot afford the cost of inaction,” said Governor O’Malley. “Together, with Senate President Miller and Speaker Busch, we’re announcing a plan that is balanced, fiscally responsible and is projected to support 44,000 jobs. This plan will help us generate the revenue we need to ease some of the worst traffic congestion in the nation while building and repairing our transportation infrastructure.”
“Our Transportation Trust Fund is about to go broke and we must act now,” said Senate President Miller. “Working together and reaching the consensus reflected in the proposal is a tremendous step forward that can turn our transportation crisis around. I remain committed to working as hard as I can with the Speaker and the Governor to get this done.”
“We have worked hard over the past few weeks to craft a transportation initiative that balances the impact on the consumer with the future infrastructure needs of the State,” said House Speaker Busch. “We must make strategic investments and leverage private dollars to move our State forward. A strong transportation system is the cornerstone of a strong economy.”
The proposal unveiled today includes the following measures that would become effective July 1, 2013:
- Reduce the state tax on gasoline by five cents from 23.5 cents per gallon to 18.5 cents per gallon;
- Index the 18.5 cents per gallon state gasoline tax to the Consumer Price Index;
- Phase-in application of the state sales tax on the wholesale price of gasoline starting at two percent July 1, 2013 and increase to four percent July 1, 2014;
- Transportation to receive a percentage of revenue generated by implementation of the federal Marketplace Equity Act (enabling states to apply sales tax to internet sales, provided passage by Congress.);
- Index transit fares charged by the Maryland Transit Administration to the Consumer Price Index;
- State Treasury to issue General Obligation Bonds for federally required environmental improvements.
The transportation initiative proposed today also contains a “lockbox” provision that outlines a series of requirements that must be met in order to make any transfers from the Transportation Trust Fund, ensuring that revenue generated remains dedicated to transportation.
“The unified support of the Governor and legislative leadership around a comprehensive funding proposal is essential to addressing the state’s growing transportation crisis,” said Donald C. Fry, president and CEO of the Greater Baltimore Committee and a leading transportation advocate. “It is critically important to resolve this mobility crisis during the current legislative session for Maryland’s future economic growth, job creation and quality of life.”
Traditionally, a primary source of revenue to fund transportation improvements in Maryland has been the state tax on gasoline. The current 23.5 cents per gallon charged at the pump has not been increased since 1992. Without an increase in highway funding, by 2017 the State Highway Administration’s budget for new construction will drop to virtually zero as all available dollars will be required to simply maintain the road and bridge network already in place. New dollars generated by this proposal would address road and bridge needs in every region of the State delivering improvements in the areas of capacity, safety, the environment and economic development, as well as community enhancements.
Additional funding will support improved WMATA and MTA core services, locally operated transit systems, and MARC commuter train service. It also would support the completion of the design, engineering and right of way acquisition phases for the Red Line in the Baltimore region and the Purple Line in the Washington region, as well as continue to allow development to proceed on the Corridor Cities Transitway.
The proposal also calls for the creation of a work group to recommend funding mechanisms to raise funds for local transportation systems and study the feasibility of regional transit financing entities to support transit investments and services in metropolitan areas, an effort that will be instrumental in the development of a funding plan to pay for construction of these vitally important projects.
Without additional funding, development of both the Red and Purple lines will come to a halt later this year, just as similar projects in states and regions across the country are locked in competition for the limited amount of federal money available to fund new transit initiatives. Maryland must demonstrate its projects are moving forward or risk losing federal transit dollars to other states and regions.
A companion piece of legislation in the General Assembly this year would provide the State with an enhanced public-private partnership program (P3). If passed, the legislation, spearheaded by Lt. Governor Anthony G. Brown, could open the door to private infrastructure investment that could easily meet over $120 million in transportation needs over the next five years.
For more information on the need to upgrade Maryland’s transportation infrastructure and the cost of inaction,click here.