By Adam Pagnucco.
A looming crisis threatens to devastate Maryland’s transportation program. As much as one-third of the state’s transportation project spending could be at risk. Key projects will be delayed, perhaps some indefinitely. Is this because of the transportation transparency law that Governor Larry Hogan wants repealed?
No, not at all. The real problem is something much more mundane, something Hogan does not want to talk about: a gaping budget hole.
The Transportation Trust Fund (TTF) is a segregated fund used to finance Maryland’s transportation programs. Its largest sources of revenue are motor fuel taxes, titling taxes, registration fees and other Motor Vehicle Administration fees. It also receives a substantial amount of federal funding. Its proceeds are used to finance the Maryland Department of Transportation’s (MDOT) operating expenses as well as MDOT’s debt service and six-year capital program. This means that funding for transportation capital projects is subject to variations in TTF revenue as well as changes in MDOT’s operating costs and debt service.
Page 43 of the Fiscal Briefing reviewed by the General Assembly last week shows a substantial deterioration in the TTF over the last year. The briefing states:
The six-year State capital program in the Maryland Department of Transportation (MDOT) fiscal 2017 through 2022 Transportation Trust Fund (TTF) forecast is $1.5 billion lower than in the prior year’s six-year program. Lower estimated revenue attainment, primarily motor vehicle fuel tax revenue, accounts for about half the decrease with higher projections for debt service and departmental operating expense spending accounting for the other half of the reduction in the capital program.
The briefing continues:
MDOT did not use the five-year average annual increase in operating expenses to calculate out-year operating expenses as directed in the 2016 Joint Chairmen’s Report. As a result, MDOT’s forecast likely understates operating expenses by $585 million over the forecast period, or just under 5%, and overstates the amount available for the capital program by $1.7 billion.
Translation: $1.5 billion in forecasted transportation spending, or 15% of the state’s six-year total, has disappeared in one year. And the administration’s underestimating of MDOT’s operating expenses could cause the capital program to drop another $1.7 billion.
That’s right, folks: one-third of all funding for state transportation projects could be evaporating.
Now let’s be fair. Governor Hogan does not control revenues for transportation, which are chiefly determined by the state of the economy. Their substantial drop suggests that the economy is not doing as well as Hogan says it is. The economy could get even worse if Republicans in Washington repeal the Affordable Care Act – something that would cost Maryland tens of thousands of jobs – and push through substantial cuts to federal agencies. The Governor is also only in partial control of MDOT’s operating expenses, which include substantial amounts of materials and supplies purchased from private vendors. Those expenses are squeezing money for transportation along with the revenue shortfalls.
But one thing the Governor does control is his own behavior. A reasonable Governor acting in good faith would go to the General Assembly and say, “Look folks. We have a problem here. Let’s get together and figure out how to deal with it.” That would be in line with the Governor’s regular calls for bipartisan cooperation.
Instead, the Governor has launched a Holy War against the General Assembly’s transportation transparency law, which merely requires him to justify the projects he chooses to fund. He falsely claims that the law would require him to cancel projects when it does no such thing and even announced funding for one project a week after he said it would be killed. Instead of working with members of the General Assembly to remedy a real budget problem that threatens transportation projects, he assaults them on Facebook about a fake problem that he has made up.
One of several Facebook posts the Governor is using to target state legislators.
It’s a scam, folks. This Governor does not want to deal with an impending transportation crisis that is happening on his watch. Instead, he is trying everything in his power to shift blame to Democrats in the state legislature.
Don’t fall for it.