“We currently have an estimated funding gap of more than $2 billion over six years just to realize many of the existing projects we have outlined in the past,” Secretary of Transportation Paul J. Wiedefeld said Wednesday at a news conference in Annapolis. ” he said.
Inflation is Construction costs and labor costs have soared, the cost of ongoing projects will be higher. At the same time, fuel-efficient cars, pandemic-era commuting patterns, and the introduction of electric vehicles have reduced gasoline use, flattening a major revenue stream that used to fund transportation projects.
Maryland transportation officials say even with billions of federal dollars available through the $1.2 trillion infrastructure bill, without increased transportation revenue and tough decisions about which projects to keep, the state won’t have enough. He warned that the funds may not be available.
The state expects to have sufficient funding in fiscal years 2023 and 2024; project It will have a $100 million deficit in fiscal year 2025, increasing to about $500 million in each of the next four years, and a $2.1 billion deficit by fiscal year 2029.
Wiedefeld also addressed the financial situation in a letter accompanying his report earlier this month. 521 page draft plan The transportation project is expected to be built over the next six years.
“Simply put, current funding levels do not provide the level of investment needed to transform the system to achieve our common goal of a safe, sustainable and fair system that fosters economic competitiveness. ” he said. I have written.
Moore also sounded the alarm about the state’s lack of financial resources to achieve other important goals, warning that “our economic engine is not supporting our ambitions,” and that government leaders He called on the United States to maintain “discipline” while deciding how to improve its lackluster policies. A state economy that has barely grown over the past four years.
Wiedefeld spoke Wednesday before a state commission convened to decide how to pay for transportation projects by the end of the year. The General Assembly formed the panel after acknowledging that 2013’s hotly contested gas tax hike was not the funding solution that lawmakers had long sought.
Like in Maryland, transportation officials across the country are planning for a future where the proliferation of electric vehicles eats up gas tax revenue.
Several states are testing systems that charge drivers a flat fee for each mile they drive. This is an approach widely seen in the transportation industry as a long-term solution. However, systems can be complex and often include elements that track drivers. Meanwhile, many states impose fees on electric vehicles to generate revenue.
At the federal level, gas tax revenues have long failed to cover the costs of transportation spending. Although improved vehicle fuel efficiency is a contributing factor, the difference is largely due to Congress’ failure to raise taxes since 1993.
To fill the hole, lawmakers are relying on replenishing the federal Transportation Trust Fund with general funds. The infrastructure law also requires the U.S. Department of Transportation to pilot a national mileage pricing system, but little groundwork has been established for this project.
Maryland’s traffic shortage is unusual compared to previous years. Until now, state officials have responded to dwindling resources by simply postponing transportation projects or removing them from six-year plans.
Wiedefeld said Wednesday that his agency wants to have a public discussion about how to allocate resources.
“I chose a different path,” he said. “We need more transparency in the funding decisions made for the state’s transportation capital programs,” he said. “Decisions about how to prioritize projects must be based on our shared values and priorities.”
Gasoline tax revenue makes up about 20% of the state’s Transportation Trust Fund budget, making it the state’s largest source of funding outside of federal funds. Gasoline sales have recovered from the pandemic-induced slump, but Gallons sold in 2022 decreased by 4.4% compared to 2019, said Ed Regan, a transportation consultant hired by the state. Maryland officials expect gasoline tax revenues to remain flat over the next few years as fuel efficiency continues to improve and electric vehicles become more popular.
At the same time as Maryland’s construction budget shortfalls, the state faces an impending bill to bail out its Washington-area subway system, which will be cut by seven in the next fiscal year due to ballooning labor costs and declining ridership. A shortfall of $50 million is expected. . The state shares financial responsibility for the transportation system with Virginia, Washington, D.C., and the federal government.