Maryland transportation officials this week fielded questions from state lawmakers about the $3.3 billion budget shortfall they face in funding their six-year plan.

Though the administration of Gov. Wes Moore avoided drastic cuts for the coming fiscal year, they are looking at shortfalls in the following years, prompting lawmakers and officials to search for new revenue streams to fund transportation. Contributing to the budget squeeze is a trend of higher costs and declining gas tax revenues, which has traditionally funded such matters.

Maryland’s highway and transit agencies account for more than half of the state Department of Transportation’s spending on both capital projects and operations. They are followed by the Washington Metropolitan Transit Agency, which runs the Metro subway and bus systems.

Transportation Secretary Paul Wiedefeld, Maryland Transit Administrator Holly Arnold and State Highway Administrator William Pines appeared at a House of Delegates appropriations subcommittee hearing on Monday to discuss their budgets for the coming year. A similar hearing was held in the state Senate last week.

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Here are five big takeaways from Monday’s hearing:

1. Baltimore transit services could still face cuts

When Gov. Moore shored up the Maryland Transit Administration’s fiscal year 2025 budget with a one-time, $150 million infusion from the state’s general fund to the transportation trust fund in January, it staved off a number of potential service cuts. Regional commuter bus service would be able to maintain all but eight current routes, and MARC rail service avoided similar austerity.

But that’s just for the fiscal year that begins July 1. Transit advocates were quick to point out that the projected $3.3 billion shortfall over six years was backloaded, and that it was still north of $3 billion for the next five fiscal years.

Budget analyst Carrie Cook of the Department of Legislative services alluded to just that on Monday afternoon in her opening presentation. “MTA expects that absent significantly increased revenues, similar reductions in these items will have to be made in the out years,” Cook said.

Among the lingering questions: Will that mean more cuts to commuter bus service? As driver salaries make up the lion’s share of MTA’s operating budget, will it mean slower hiring for a department that has worked to limit bus cancellations by bringing its vacancy rate down?

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2. The MTA’s $2 billion backlog of rehab work is growing

“State of good repair” — these four buzzwords have often been in the news lately. Major, multiday shutdowns of both Baltimore’s subway and light rail lines last year brought to the forefront how well the state is keeping its transit assets in proper working order.

The state simply isn’t investing enough money to make sure all its buses, trains, tracks and systems have five-star ratings. Wiedefeld made clear in response to lawmaker questions that this isn’t unusual — Maryland isn’t alone in having to prioritize the most dire repairs.

But the numbers are substantial. The MTA’s 2022 Capital Needs Inventory estimated a nearly $2 billion backlog of rehab work, a hole that would require a little more than $500 million in annual spending for repair initiatives. Lawmakers mandated a minimum level of state-of-good-repair spending through the 2021 Transit Safety and Investment Act, but Del. Mark Edelson noted that it does not reach that $500 million level currently.

To top it off, Arnold told the committee the MTA was spending just 60-70% of allocated money for such rehab work, citing increasing difficulties caused by pandemic-related supply chain disruptions. Arnold pointed to bus brake pads as an example: Years ago, a single supplier could stock the MTA with brake pads, no sweat. Now, they have to seek out multiple suppliers to get the same number of pads, meaning more time and energy spent on an arduous procurement process.

Arnold projects that the backlog will grow, and that the annual ideal spending figure to fix everything will be close to $600 million by next year.

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“There is intense competition, if not conflict, between improving and expanding the system and doing what is necessary to keep things running both functionally and safely,” Jon Laria, chair of the new Baltimore Regional Transit Commission, told the House committee. Laria’s group is, among other things, exploring the possibility of more local control for Baltimore transit. “There’s just not enough money to do both responsibly,” he said.

It’s not all bad news, though, as a roadmap for overhauling the MTA fleet has been drawn. The federal government recently announced a $213 million grant to replace the light rail fleet in the coming years, and the first seven zero-emission buses are now in service. The first of 78 new heavy rail cars to replace the Baltimore subway system’s 40-year-old cars arrived last year.

3. Delayed Purple Line could affect planned Red Line in Baltimore

Another day, another Purple Line delay.

Last week, the MTA announced the latest setback for the coming 16-mile light rail line crossing Montgomery and Prince George’s counties. The project should boost connectivity in the Washington metro area and relieve congestion on the dreaded Capital Beltway. Construction has been repeatedly delayed since one of the contractors pulled out; the MTA took over management of tricky utility relocation work in 2020.

Officials pushed the target opening of the line from spring 2027 to the following winter, and are projecting up to $425 million in additional costs from what they previously anticipated. If construction, which is now 65% done, remains on the new schedule, it will open to the public 18 years after light rail was selected as the preferred mode, and 14 years after its funding structure was set as a public-private partnership.

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Jared Solomon, a Montgomery County Democrat, asked if this was the last setback his constituents could expect. Wiedefeld wouldn’t make that promise, meaning another delay is possible.

But for the Baltimore representatives on the committee, the elephant in the room was the color red, not purple.

“The agency should discuss how the additional delay and contract modification may impact other projects and priorities, particularly given the current strain on the [Transportation Trust Fund] and anticipated reductions in operating capital budgets,” said budget analyst Cook.

The Red Line — the planned east-west transit service in Baltimore that will be either light rail or rapid bus — will need federal help to get done. Del. Malcolm Ruff asked Arnold and Wiedefeld if Baltimore’s record on state of good repair could make it less competitive for big federal grants. The transportation secretary conceded that it was something his agency needed to take very seriously.

4. Exploring alternatives to the gas tax

Though better for the environment, increasingly fuel-efficient cars are worse for Maryland’s transportation pocketbook. The motor fuel tax accounts for roughly a quarter of the state transportation fund, which officials are scrambling to find new revenue streams for.

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One new approach, a Mile-Based User Fee (MBUF), is currently in a pilot stage in the state. Washington, Utah and Oregon have already implemented such fees, which are meant to serve as a scaled tax based on how much individual drivers use roadways.

The motor fuel tax historically served this purpose, but it won’t capture electric vehicles that cause wear and tear on roads just like their gas-guzzling counterparts. As lawmakers also consider implementing additional registration fees for EVs, the potential user fee could one day be the new gas tax.

Mileage for participating drivers is tracked in one of four ways, including GPS-enabled devices and car odometer readings. Baltimore County Del. Nino Mangione expressed concern about data privacy and how much of a cost burden a mile-based user fee could become for the average Marylander.

Wiedefeld said the pilot program is just a simulation and not actually charging participants, and that it will give his agency a better sense of drivers’ interstate travel patterns. The state should have the results of the pilot program in May, he said.

5. Could Baltimore take a hit on highway user revenues?

MDOT distributes a portion of revenues from the gas tax, car registration and other fees to localities to help them maintain local roads and bridges. Currently, the agency pockets just under 85%, with the remainder getting doled out to local governments.

Baltimore City is the only jurisdiction in Maryland that doesn’t get direct state assistance for road maintenance. As such, the state lets the city keep a higher percentage of so-called Highway User Revenues.

The Department of Legislative Services doesn’t think that’s such a good idea. Citing the department’s fiscal troubles, analyst Steve McCulloch recommended that state policy revert back to pre-2020 levels, when all jurisdictions kept just 9.6% of such revenues. Though good for the state’s larger budget outlook, such a move would have an outsized impact on Baltimore, where legislators fought hard to win the extra dollars.

Daniel Zawodny

Daniel.Zawodny@thebaltimorebanner.com

Daniel Zawodny

Daniel Zawodny covers transportation for the The Baltimore Banner as a corps member with Report For America. He is a Baltimore area native and graduated with his master's degree in journalism from American University in 2021. He is bilingual in English and Spanish and previously covered immigration issues.

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