TOWSON – Higher gas prices and the trend toward smaller cars is slowing the growth of the Maryland Transportation Trust Fund, prompting officials to warn that they’re going to be tight-fisted about new highway, bridge and mass transit projects.
“We’re coming up on some major decisions we’ll have to make in terms of transportation projects,” Maryland’s transportation secretary, Robert L. Flanagan, told a meeting of state and local transportation officials here.
The Transportation Trust Fund is used to support transportation services and various projects in Maryland, and is supported by taxes, motor vehicle fees (registrations, licenses and other fees), and federal-aid.
Two taxes have especially been influenced by the increase in the cost of gas – the 23.5-cent gas tax, and the motor vehicle excise tax, which comes from titles of new cars.
Both of these taxes brought in less revenue than expected for fiscal year 2005.
Flanagan said the Department of Transportation had projected a 2.25 percent increase in funds from the gas tax for 2005, but only a 1.75 percent increase actually occurred, causing a shortfall of about five million dollars.
Michael Golden, spokesman for the state comptroller’s office, said the state gas tax brought in $763 million for fiscal year 2005, which was an increase from $730 million in 2004 – but not as large an increase as was expected.
“It’s not surprising that it hasn’t grown as much as anticipated,” he said, “but the important thing is that it is not declining.”
Flanagan said the titling tax on new vehicles was projected in the budget to increase 1.8 percent. Instead, no increase occurred. This caused a shortfall of about $15 million, he said.
“People are not necessarily buying fewer cars,” Erin Henson, spokeswoman for the Department of Transportation, said, “but they’re buying smaller cars, which use less gas, and those smaller cars don’t bring in as much money from taxes as large SUVs.”
That’s because the titling tax is five percent of the vehicles cost, she said, and bigger SUVs tend to cost more than small fuel efficient cars.
If the trend in both gas and titling taxes continues over the next six years, it could cost the state $120 million, which is why planners must be extra careful to conserve, Flanagan said
“We need to be cautious and protective,” he said. “We need to defend the programs the government has set forth … but we want to be as efficient as we can.
The department will remain committed to projects that have already been announced, Henson said, but there will not be any new projects added right now.
“This challenges our ability to maintain the budget,” she said. “Our current budget does not reflect the fact that there is less money in there.”
“We want to have great a great port, a great airport, great highways, and a great transit system,” Flanagan said. “All of these can be accomplished, but they demand that we be cost conscious and efficient, and this is even more important with what is happening with gas prices.”
Sen. Verna L. Jones, D-Baltimore, said it is important that existing projects that are being funded by the trust fund are not cut, especially public transportation.
“Given the gas prices right now, individuals are looking toward transportation in a different way,” she said. “We don’t have any control over the amount of money that is going into the fund, but we need to assess the situation and do the best we can to ensure transportation projects are not negatively affected.”
And Sen. Ida G. Ruben, D-Montgomery, said the trust fund can not afford to loose any more money. “We have a traffic crisis in our state in many areas that is already costing us money, and when we don’t have enough money in the transportation trust fund, to loose the additional $20 million is very disturbing.”