Higher EV, hybrid fees among options to shore up Maryland transportation funding

Maryland Transportation Secretary Paul Wiedefeld and other officials have sounded the alarm over the long-term health of the well the state taps for funding transportation — as Marylanders hop in more electric and fuel-efficient vehicles over gas guzzlers, the state has brought in less revenue from the gas tax factored into the price at the pump. Last week, Wiedefeld announced his office would be cutting more than $3 billion worth of funding from the state transportation budget it sends to lawmakers for signature, citing declining revenues and increasing costs.

Last legislative session, lawmakers created the Maryland Commission on Transportation and Infrastructure Needs to make recommendations across a broad range of issues. The 31-member group of legislators, transportation experts, business leaders and more has been researching and exploring short- and long-term ways to shore up the state’s Transportation Trust Fund — a significant funding source for transportation projects — in addition to guidance on leveraging new technologies and improving the state’s transportation budget process.

In its fifth meeting, the commission voted Wednesday to make six recommendations for the General Assembly to consider in its session beginning Jan. 10.

1. Additional registration fees for electric and plug-in hybrid vehicles

After reviewing options, the Motor Vehicle Administration determined that a $200 additional registration fee on fully electric and hybrid vehicles could generate up to $40 million in additional revenue by the budget year beginning July 2024 and up to $119 million by the budget year beginning July 2028. The commission also presented an option charging $200 for fully electric vehicles and $100 for hybrid vehicles — a nod to the gas-powered components in hybrid vehicles — but that would generate slightly less revenue, according to modeling.

That amount serves as an accurate average proxy for how much the owner of a nonelectric vehicle would pay in gas taxes over the course of a year at the pump, the MVA determined. The General Assembly would then decide whether to impose a fee on electric and hybrid owners, and how much it would be.

Frank Principe, chairman of the commission, emphasized that commissioners were not formally recommending specific figures on those fees, but simply offering examples of how much revenue fees could raise.

“Although this would provide a significant new source of revenue to the Trust Fund and create more equity by assessing a fee to all vehicles, the Commission noted that this new revenue alone would not sufficiently supplant funding lost from the decrease in motor fuel tax revenue,” Frank Principe, chairman of the commission, wrote in the interim recommendations memo.

Commissioner Josh Tulkin, director for Maryland’s chapter of the Sierra Club environmental group, raised concerns over the wording of the recommendation, citing other states that have passed similar laws that put an undue burden on EV owners, he said. He and the majority of commissioners ultimately approved the recommendation with revised wording.

2. Raise toll prices

Sen. Stephen Hershey, an Eastern Shore Republican and minority leader in the state Senate, fought an initial version of this recommendation that raised tolls only for out-of-state E-ZPass holders on the grounds that he believed it could violate federal commerce law.

The commission adopted the recommendation after broadening it to suggest tolls be increased for everyone.

Some commissioners also fought language that instructed new toll revenues be allocated for uses other than toll facilities themselves, but the recommendation ultimately kept that language. The Maryland Transportation Authority, which oversees toll facilities, funds itself exclusively through toll revenue. The state has a mechanism to divert toll money to other priorities, but it is not typically done. Again, the decision whether to do so would be made by the General Assembly.

3. Adjust MVA fee amounts/payment options for low-income individuals

The MVA would determine those changes later.

4. More transparency in MDOT’s budget process

Many advocates and lawmakers have long bemoaned the process for crafting Maryland’s Consolidated Transportation Program, a behemoth document put forward to the General Assembly each year, as opaque and hard for those on the outside to understand. The commission recommends the state adopt a process that makes prioritization of projects clearer.

5. Include safety, accessibility, climate change and more in budget process

In addition to a clearer process, the commission wants to see an “equitable allocation of funds” for expansion of all transportation modes, including transit and airports. It also put forward a “comprehensive approach to road projects” that build up mobility and alternative transportation options along roadways.

6. Standardize how counties present specific projects; balance the budget

Maryland’s 24 jurisdictions submit priority letters to Wiedefeld and his team outlining their projects and goals they hope to see reflected in the state’s transportation plan. Creating a more standardized process could help counties feel better represented and create more transparency.

The commission also stressed the importance of presenting a balanced budget with the plan; this year’s draft document released in October was the first in Maryland history to have a budget shortfall.

Wiedefeld acknowledged there’s been lots of debate within the commission and throughout the process and that everyone’s voice is needed to make these decisions. ”We have some big issues we have to deal with,” he said after the meeting.

Wiedefeld said the commission has carved out clear priorities for the General Assembly to address next year.

”At the end of the day, the legislature and the executive branch will have to come to some consensus for all these issues going forward, and this is part of the process,” he said.

Principe and other commissioners reiterated this sentiment throughout Wednesday’s meeting, emphasizing the commission’s role as adviser, not policymaker.

“We’re not drafting bills here today. We’re providing guidance to the General Assembly,” said Principe, adding that his goal was to provide “as broad a latitude as possible to move these things forward.”

Wiedefeld said the work of the commission has been valuable and that it’s important to understand the complexities facing officials and lawmakers as traditional revenue sources diminish.

”It’s important that the public understand that we have to start to think of these things because that’s how we support the economy,” he said.

Correction: This story has been updated to correct that the TRAIN commission recommended broadly raising tolls.

Daniel Zawodny covers transportation for The Baltimore Banner as a corps member with Report For America, a national service organization that places emerging journalists with local newsrooms that cover underreported issues.

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