Maryland Watch: Is Gov. Hogan Really Raiding the Transportation Trust Fund?

from The Dagger

Democrats think they have their teeth in a new way to get a piece of hide out of Governor Larry Hogan over the Transportation Trust Fund (TTF). Their target is because Governor Hogan has proposed two major changes that will bankrupt the TTF for new projects, one is stopping the gas tax increase where it’s at now, and the other is restoring cuts made by Governor Martin O’Malley to the Local Highway User Revenue allocation.

The unspoken argument is that if Hogan stops the gas tax it basically is the end of the Purple and Red line, two projects that will cost $3 billion each, one for the Washington suburbs and the other for Baltimore. The spoken defense is that the people spoke during the last election by passing a constitutional amendment to prevent raids of the Transportation Trust Fund. Democrats also got the equivalent of a House of Card style kid being shot during a teacher’s strike when a piece of road debris fell off a bridge and into the windshield of a grandmother’s car.

The stopping of the gas tax is pretty straight forward. There are two components of the gas tax, one is a hidden sales tax of 5% that was being phased in, that is currently at 3% and the second is that the gas tax’s base rate of 30 cents per gallon is indexed to inflation so that it will go up in perpetuity to keep up with the rising cost of construction. The base tax rate just went up by 3.5 cents at the first of the year and went up .5 cents last July. This indexed portion of the gas tax goes up no matter what without a vote. What Governor Hogan is proposing is to stop it all where it’s at, and if the legislature wants to increase it to fund a transportation project, then they can have a separate vote. Democrats argument against stopping the gas tax is that it’s such a small tax that the average driver won’t notice (they’ll be saving $80 a year) yet it would do so much good (the Purple and Red lines).

The second phase that is the rhetorical target is the restoration of the local highway user revenues. Prior to FY2010, counties would get a share of local highway user revenues which comes from the gas tax and other fees. It used to be 30% and Governor O’Malley dropped the local share down to 9.6%, 7.7% of which is dedicated strictly to Baltimore City, 1.5% to all the counties, and .4% to all the municipalities in Maryland. This has been the biggest complaint from local governments and during the campaign Hogan promised to restore it. His legislation will follow through with that promise and eventually get the local share back to its 30%. Democrats have targeted this as a “raid” on the Transportation Trust Fund because it is altering the amount of money that goes to the fund, even though the money will still be used for transportation programs, just ones decided by local governments rather than state governments.

Democrats keep pointing to the fact that Hogan promised during the campaign not to raid the Transportation Trust Fund. Of course he technically can’t raid the TTF because the voters passed a constitutional amendment that prevents money being transferred out of the TTF, but the rhetoric from the Democrats that this is a raid sounds much better for them. When challenged they like to accuse Republicans of only being FOR the raid because Hogan is a Republican, rather than acknowledging that this isn’t a raid.

Senate President Mike Miller summed the whole thing up best though, Larry Hogan will regret stopping the gas tax increase because the system is unsustainable. Inflation occurs and roads, busses and rail get more expensive to maintain and build. 30 cents per gallon will not do as much as 30 cents per gallon will in 20 years. But Hogan also has to balance this with his ideology and legitimate belief that good government is actually voting for things, the desires of his base, and telling voters he tried, because in reality, all he can do is try, Mike Miller isn’t letting this go anywhere.