ANNAPOLIS – Some legislators are calling for the state to reverse its recent trend of depending on large-scale revenue transfers to balance its budget, proposing a new bill to rein in the practice they describe as fiscally irresponsible.
Delegate Susan Krebs, R-Carroll, has introduced bills for the last several years that would block any non-emergency transfers out of the Transportation Trust Fund – a pot of money originally seen as providing exclusive support to the Department of Transportation.
“This year it has become even more crucial, because after 25 years of raiding the fund, this year is the worst yet,” Krebs said at a hearing on the bill at the House Appropriations Committee Tuesday.
The Budget Reconciliation and Financing Act of 2010 calls for transferring $340.3 million from the trust fund into the state’s general fund for fiscal year 2011 — a sum that would surpass this year’s $321 million record. The money would help the state cover its operating costs as revenues have sagged during the economic recession.
The Department of Legislative Services has further recommended that the state transfer $60 million annually starting in 2013 to “relieve funding pressure on the general fund.”
“All of these actions signify that the Transportation Trust Fund is one of the first places people look when they need money for the general fund,” Barbara Wilkins, legislative counsel for the Maryland Transportation Builders and Materials Association trade group said at the hearing.
The bill would allow the General Assembly to pass transfers out of the trust fund in an emergency, which Krebs said was a compromise. Her “ultimate goal,” she said, is to get the state to leave the transportation funding for transportation projects – no exceptions.
“It’s called a trust fund. It’s supposed to be set-aside money for transportation projects,” Krebs said in an interview. “In this economic environment, my gosh, it’s even more reason to keep money in the transportation trust fund. These are the people who we are employing to build our roads.”
Krebs’ bill would further require that the transferred money be returned to the fund within five years.
But while Krebs limited the “extraordinary circumstances” that might merit use of the fund to an “earthquake, war or bombing,” Delegate Murray Levy, D-Charles, said in a separate interview that the current recession should also apply.
“In economic times like these … we’re struggling to keep very basic programs,” Levy said. “We have to make tough choices, and we’ll take money away from more long-range projects for our short-term expenses.”
Levy, a member of the Appropriations Committee, further disagreed with any bill that would “tie the hands of elected officials” and noted that this bill could easily be undone at any point even if it did pass this year.
There is “some justification” for a section of Krebs’ proposed bill calling for greater transparency in the fund transfer process, Levy said.
Under the current system, large-scale fund transfers are just one part of a widely varied budget bill – this year a 42-page document that specifies an assortment of items that includes mandated staffing levels in soil conservation districts and a $7.50 fee for motorists convicted in traffic court.
“Instead of bringing these tough issues to the legislature, they’re coming through this big omnibus bill,” Krebs said.
Under her proposed legislation – which she considers a compromise – any Transportation Trust Fund transfer would need to come before the General Assembly as its own bill. So even if her colleagues disagreed with her that the fund should be untouched, Krebs said, “at least it would be transparent.”