ANNAPOLIS – State transportation officials are proposing an increase in the use of controversial bonds to pay for the Inter-county Connector, a move critics charge would jeopardize other road projects in the long run.
The original, September 2003 ICC funding plan called for between $900 million and $1 billion from GARVEE, or Grant Anticipation Revenue Vehicle, bonds. Now the $1.8 billion project needs about $1 billion, said Transportation Secretary Robert Flanagan.
Flanagan, in a discussion with the House Appropriations Subcommittee on Transportation and the Environment Tuesday said the use of GARVEE bonds will rise from 13 to 20 percent of the federal highway dollars earmarked for Maryland.
The bonds are repaid using federal highway money. Payments will be spread over the next 15 years for the ICC, an east-west highway designed to connect Interstate 95 with Interstate 270. Maryland’s annual federal highway funds are anticipated to be more than $500 million per year, according to the Maryland State Highway Administration.
Increasing the bonds to 20 percent will have to be voted on by the General Assembly because it requires a change in law, said Delegate Peter Franchot, D-Montgomery, subcommittee chairman. Earlier this year, lawmakers capped the use of GARVEE bonds at 13 percent.
The cap increase concerns Delegate Mary-Dulany James, D-Harford.
“We need all the federal dollars we can get,” said James, subcommittee vice chairwoman. “You’d be taking dollars (for) highway preservation and channeling it to pay off debt for the ICC.”
However, even with increased GARVEE bonds, Flanagan said the transportation authority has a balanced funding package and will continue to move forward with new projects. Transportation officials are not trying to take money from other projects, said Flanagan.
“That is not something we want to do. That is a terrible suggestion,” said Flanagan.
Franchot sees problems with trying to get the GARVEE cap raised, and instead recommended a 4-cent gas tax increase over the next 15 years.
“Are you trying to tell me that we’re going to go from 13 to 20 percent of future federal funding but we’re not going to impact anything else?” asked Franchot.
Moving forward with a balanced transportation program to satisfy everyone’s aspirations is what Flanagan said he wants.
“I get very upset at the suggestion that we try to take money out of other people’s projects,” said Flanagan.
And a gas tax wouldn’t raise enough money, he said. Costs for the project increase by $100 million every year because of inflation and the proposal by Franchot would only serve to offset that inflation cost, Flanagan said.
“Inflation is not a fantasy,” said Flanagan. “A $100 million increase a year in the cost of the ICC is not a fantasy.”
The need for the ICC is apparent, Franchot said, but Flanagan’s funding proposal is unreasonable.
“Get me a shovel and I’ll be right out there with you tomorrow morning,” Franchot said. “All we’re saying is the funding concept that you have has more or less reached the end of the outer boundary with our action last year.”
Last year, the Legislature limited the GARVEE bond term and cap after transportation officials asked for 30-year bonds with an unlimited amount, said Franchot.
“I don’t think there’s an appetite to go farther than 13 percent,” said Franchot.
Delegate George Edwards, R-Garrett, backed Flanagan’s proposal saying it’s the fairest way.