Donald Fry: Transportation funding ‘lockbox’ on 2014 election ballot

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By: Donald C. Fry 

In addition to listing candidates for governor, statewide offices and local elected offices, all voting ballots for Maryland’s November 4 general election will include a state constitutional amendment to enact something long-sought by transportation advocates – a “lockbox” for the state’s transportation fund.

Question 1 on the ballot will ask voters to ratify a lockbox amendment that was passed by the General Assembly in 2013 as part of a legislative package expected to raise more than $4 billion in new revenue over six years to fund the state’s roads, bridges, transit, port and airport infrastructure.

A majority of Maryland voters must ratify the proposed constitutional amendment in order for it to become embedded in state policy.  

Specifically, the amendment would limit the use of the state’s Transportation Trust Fund for “constructing and maintaining an adequate highway system or any other transportation-related purpose.”  It would also generally prohibit lawmakers from transferring revenue from the transportation fund to the state’s general operating fund or to any other state fund except for transfer of highway user revenue to local governments and transfer of funds for use by the Maryland Transportation Authority.

The only circumstances the amendment would allow Transportation Trust Fund revenue to be used for non-transportation purposes would be if the governor declares a “fiscal emergency” and the General Assembly approves by a three-fifths vote.

A constitutional “lockbox” provision has been strongly supported by the GBC and transportation advocates for years as a way to stem what had become habitual raids on the state’s Transportation Trust Fund by lawmakers seeking to balance general operating budgets.

While lawmakers rightfully point out that most of the funding “borrowed” from the state’s Transportation Trust Fund over the years was eventually repaid, the deployment of dedicated transportation funding for other uses nevertheless detracted from the state’s ability to address infrastructure challenges.

Maryland voters interested in strengthening the integrity of our state’s transportation fund should remember to vote for Question 1 on the ballot this November.

While Maryland is among more than two dozen states that have taken steps to shore up transportation revenue at the state level, federal funding support that states have long relied upon for major road and transit infrastructure projects remains a hostage to gridlock in Congress.

For almost 10 years, Congress has been kicking the federal transportation funding issue down the road through a series of short-term extensions. The latest, passed on July 31, is a 10-month extension allocating $10.8 billion to the Highway Trust Fund – the source of federal funding for highway and transit projects across the U.S.  This will keep the fund solvent until May 2015, when members of Congress will again try to tackle the issue of long-term funding.

“What will happen after next May is anybody’s guess,” transportation expert Ken Orski said in recent remarks at a Council of Governments legislative conference in Arkansas.

“A six-year surface transportation measure that transportation stakeholders want would require roughly $330 billion to maintain current spending levels. But Trust Fund revenue and interest over the same period is projected by the Congressional Budget Office to bring in only $230 billion—leaving a truly staggering funding gap of $100 billion,” Orski said.

Potential options for closing that gap range from increasing and indexing the federal gas tax rate – which currently has little support either in Congress or among the American public – to proposals to generate transportation revenue from repatriating overseas corporate profits.

Proposals issued in April by the Obama administration and U.S. Department of Transportation would yield more than $100 billion for infrastructure from repatriation provisions in corporate tax reforms, but such reforms have no chance of passage, according to Capitol Hill observers.

Meanwhile, Maryland Congressman John Delaney is sponsoring a bi-partisan bill to create a $50 billion infrastructure fund from bond sales to corporations that, in turn, would be entitled to repatriate overseas profits tax-free.

Delaney and a panel of experts on federal funding will review the nature of the paralysis that exists on Capitol Hill and the prospects for achieving passage of long-term federal transportation funding authorization legislation at the Greater Baltimore Committee’s 2014 Transportation Summit on September 25 in Baltimore.

Whoever is in Congress after the 2014 elections can be assured that, across the nation, state transportation officials facing backlogs on critical projects, drivers idling on jammed highways, and commuters seeking transit options will be looking to Washington for consensus on long-term federal funding for our nation’s deteriorating transportation infrastructure.

Our elected leaders on Capitol Hill need to move mobility – a fundamental prerequisite to economic competitiveness – to the top of their priority list.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.