Tolls may increase under legislators’ proposal
Maryland lawmakers are homing in on plans to raise some toll rates for the first time in a decade and to place a new fee on electric vehicles to start solving a roughly $3.3 billion transportation budget deficit in the coming years.
Details of both plans — including who would be affected by the toll hikes and the amount of the vehicle fee — are up in the air as the General Assembly enters the final month of its annual 90-day session.
But even as lawmakers remain divided over how and when to fix the state’s mounting financial problems, the two paths toward at least some more transportation revenue are coming into focus.
“I have a dirty secret for you. The tolls need to go up no matter what,” Del. Marc Korman, a Montgomery County Democrat and leader on transportation policy in the State House, said in a committee hearing last week.
Korman’s proposal would require the Maryland Transportation Authority to implement “near optimal toll rates,” maximizing revenue by potentially raising hundreds of millions of dollars from drivers.
Both Korman and Sen. Guy Guzzone, a Howard County Democrat who sponsored a similar bill and is in charge of the Senate’s budget process, said in their respective committee hearings that the plan is likely to change significantly.
Guzzone said a final bill could be targeted to just out-of-state drivers. Korman said it might let the Maryland Transportation Authority structure the increase so that it covers both its needs and a transfer of a certain amount — possibly $50 million or $100 million — to help other transportation projects.
“This bill is complicated, and I’ll just say that from the start,” said Guzzone, noting he was launching a workgroup to evaluate the best options.
Toll prices have not increased since a 2011 decision led to hikes that year and in 2013. Former Republican Gov. Larry Hogan cut toll prices in 2016 and 2019 — a relief to drivers but a loss of more than $500 million for the state.
Raising the rates now to “maximize revenue” was one of the two main recommendations, as outlined by an initial report from a commission set up to make recommendations to resolve the funding dilemma.
The other was to implement a new registration fee for electric vehicles or raise registration fees for all vehicles. Drivers of electric vehicles do not pay the state’s gas tax, which accounts for the largest portion of the Transportation Trust Fund. A bill from Guzzone would set an annual surcharge fee at $100, though lawmakers are continuing to evaluate the best rate.
Though Senate President Bill Ferguson, a Baltimore City Democrat, initially indicated the Senate would not consider such revenue increases until after the Transportation Revenue and Infrastructure Needs (TRAIN) Commission’s final report next year, the recent moves by the Senate and House indicate a plan could come together before the current session ends April 8.
Still, leaders in the House and Senate are divided over how aggressively to work on the state’s fiscal challenges this year.
A $3.3 billion cut to the six-year transportation plan announced in December — because of rising expenses, less federal aid and stagnant state funding reliant on the gas tax — is only part of the problem. A structural deficit in Maryland’s operating budget is expected to balloon to $3 billion in four years, and billions more are needed for education and climate emissions-reduction plans.
Gov. Wes Moore, a Democrat, pledged to use $150 million of “rainy day” funds to restore some of the immediate transportation cuts. He has not presented new revenue options and has been questioned pointedly by lawmakers on the issue.
Korman referred to the lack of a funding plan for one of Moore’s priorities — the Red Line transit project in Baltimore — to highlight why he’s proposing solutions now, including another bill that would add fees for delivered goods as well as services like Uber and Lyft.
His bill, the Transportation Funding Act, would implement a 50-cent “retail delivery” fee on transactions for goods that are subject to the sales tax and delivered in the state, like purchases from Amazon. It also would add a 50-cent fee on passenger trips through transportation services, which would be on top of a 25-cent fee that some local jurisdictions already charge.
“You show me what way to fund transportation that is popular because that’s the one I want to do,” Korman said during a hearing on that legislation. “I do not relish this bill. But I also think we need to find effective ways to raise the revenue we need to build the things we want to build.”
On the tolling plan, he said rates inevitably will rise in the coming years to cover state debt and that current tolls are low compared to surrounding states.
For cars with Maryland E-ZPasses, it costs $3 to cross any of the three Baltimore Harbor points and $2.50 to go over the Chesapeake Bay Bridge. The standard video rate is $6 for both.
As currently drafted, Korman’s bill would allow funds raised from increasing those tolls to go toward other areas in need — but, he emphasized, even then it will be far from enough.
“$50 million or $100 million a year does not get back the commuter bus routes that are being cut. It does not keep highway user revenue and local operating transit system services for our counties intact. And it certainly does not build the Red Line in Baltimore City,” Korman said in an interview.
Transportation officials are seeking federal funding for projects like the Red Line, which Moore re-launched with fanfare last June, eight years after Hogan shuttered the process and rejected federal funding already allotted to it.
But even by the most conservative estimates, the state could be on the hook for $2 billion to cover the costs in future years, said Del. Jared Solomon, a Montgomery County Democrat who chairs the Maryland Transit Caucus.
“We don’t even talk about how that [$3.3 billion] hole does not include the potential amount of money that the Red Line will need,” Solomon said.
It also doesn’t include last week’s announcement of $425 million in additional spending needed on the Purple Line rail project in the Washington, D.C., suburbs. That additional cost was the latest in a string of cost overruns and delays for the project, putting even more pressure on officials in the coming years.
“With infrastructure projects, the longer you put them off, like dental work, the harder they become — and the more expensive and painful they are to finish,” Solomon said.
Del. Robbyn Lewis, a Baltimore City Democrat, said “creative solutions” are essential and that not all of those will come to fruition this year. One of the State House’s most vocal transportation advocates — and one of two legislators without a personal car — Lewis said she supports the tolling expansion and fees for electric vehicles. But she also wants to incentivize getting rid of cars.
One of her own bills, the Pedestrian Fatality Prevention Act, would add annual fees of $50 to $230 to certain larger personal vehicles that Lewis said are more dangerous for pedestrians and harmful to roads. Legislative fiscal analysts said the bill could raise roughly $268 million per year. Meanwhile, her One Less Car Act would provide a tax credit worth $1,000 to individuals who sell their vehicles and no longer own or lease one. Neither bill has been called for a vote in House committees and their chances are likely slim this year.
“It’s not just tension between fossil-fuel-powered and electric power [vehicles],” Lewis said. “It’s that cars themselves are a problem. There are too many of them. So let’s build transit and draw people to other modes.”