By John O’Connor
ANNAPOLIS – Maryland’s top transportation official said Thursday thathis department needed to find ways to increase revenues – includingpossible higher taxes – or risk future projects.
Increased security costs at airports and the Port of Baltimore, cost overruns on the Woodrow Wilson Bridge project and rising maintenance costsare threatening to drain the state’s Transportation Trust Fund, Secretaryof Transportation John D. Porcari told the Commission on Maryland’sFiscal Structure. The fund is separate from the rest of the state budgetand covers all state transportation costs.
Without more money, Porcari said, the state may not be able to fund capital projects already budgeted. MDOT’s current six-year budget earmarks$9.1 billion for capital projects.
Porcari’s draft budget for fiscal 2003 proposes $8.5 billion over thenext six years. The budgets are based on estimated revenue from gasolinetaxes and other sources.
This budget does not account for a possible $1 billion in additional costs.
Two possible solutions to the financial shortfall would mean increased taxes: on gasoline and the cost of titling a car in the state. Marylandhas not increased its gas tax since a 5-cent-per-gallon increase in 1992,the longest such period in state history.
Maintenance is the state’s top priority, but maintenance costsincrease exponentially as roads and rails age. For example, it’sexpensive to keep traffic flowing by paying for night construction on theCapital Beltway while renovating bridges, said Porcari.
“This is like doing a heart transplant while running a marathon,” hesaid. “It’s very difficult to do.”
The increasing price of security since last year’s terrorist attacksalso cannot be controlled.
“When you talk about cost containment, you can’t control security,” Porcari said. “When the security level increases, the costs go up very,very rapidly. That is not going to decrease.”
Maryland’s transportation security costs have increased by $8 millionthis year, Porcari said, and insurance at the Port of Baltimore increased50 percent to $1.5 million. The state must also pay for the cost ofmodifying facilities at Baltimore/Washington International Airport asrequired by federal security mandates.
The costs, which were not budgeted, could total $200 million.
Maryland’s share of the Woodrow Wilson Bridge project, $234 million,could increase as well.
The first contract bid for the Potomac River bridge came back 75percent over the state’s estimates. The state reworked the contract,breaking it into three parts, but all bids have yet to come in.
The federal government, too, is a problem. While it’s pledged $900million to the project, it’s only guaranteed 88 percent of the money.Maryland could be on the hook for the difference — $108 million.
“We have significant funding risks for those projects,” Porcari said, referring to the Wilson Bridge and adding another set of tracks to lightrail lines in Baltimore.
Federal funding for other transportation projects is drying up, as the federal share of projects has decreased. Congress will consider renewinga transportation bill next year and Porcari said “no one” has proposedincreased spending.
If promised general fund money does not appear – as happened in 2001and 2002 – MDOT could be responsible for as much as $1 billion inunbudgeted costs, said William Hellmann, a former Secretary ofTransportation and commission member.
The commission questioned Porcari on possible revenue boosts,including more toll roads and public-private cooperation for capitalconstruction – such as a cruise ship terminal at the Port of Baltimore.Porcari also said his department is nearing its debt limit, and suggested he may ask the General Assembly to increase the amount of bonds availablefor transportation.
The commission, which is exploring ways to solve Maryland’s budgetcrunch, will release its recommendations later this year. Solvingtransportation’s budget shortage will probably take a number of solutions, said Steven S. Lakin, president of Marylanders for Better Transportation.
“We think that something needs to be done now,” he said. “It’s goingto require a patchwork of solutions.”
Last legislative session, the group pushed for three failed bills to increase funding. MBT favors a 5-cent-per-gallon fuel-tax increase,reserving a portion of the state sales tax to fund mass transit andchanging state laws to allow for public-private cooperation in road andbridge construction.