Tuesday, May 7, 2013

Maryland: “Strong Deeds” for Transportation!

Congratulations to Maryland for passing a significant gas tax increase and providing for solid transportation funding into the future!
It is an excellent bill (HB 1515, passed both houses, awaiting signature, details here).  In brief, the bill:
·      Imposes a “sales tax equivalent” of 1% on gasoline, rising in later years to 2% and 3% and under certain conditions higher.
·      Indexes the existing motor fuels tax to inflation.
·      Requires the state transit agency to set fares to achieve a 35% farebox recovery ratio (one provision I’m not comfortable with; I think this was needed to assuage rural interests).
·      Limits transfers out of the Transportation Trust Fund.
·      Increases vehicle registration fees.
·      Sets up a Local and Regional Transportation Funding Task Force to look at options for local transportation funding (e.g., local sales tax to accelerate transit projects).
·      Requires a study of possible vouchers for free or reduced fares for low-income transit users.
Quite a package!
The Maryland bill disproves two pieces of “common wisdom”:
First, it shows that legislatures can pass gas tax increases.  (Unfortunately, it was not with the bipartisan support one would like to see.)
Second, it shows that the gas tax is sustainable, at least for several years.  The indexing and automatic increases should provide significant protection for revenue.
I congratulated the Governor a year ago (here) for proposing a gas tax increase, and now I am pleased to congratulate him, the Maryland legislature, and the MDOT team for getting the job done!
Is the package big enough?  No, it’s not big enough to do what really needs to be done to rebuild the legacy transportation network and build a system for the 21st century.  But it’s a great start!

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