Municipal Leaders Applaud Efforts to Restore Municipal Highway User Revenue Funding

Governor’s Transportation Package Could Restore 70 Percent of Municipal Governments’ Share of Highway User Revenues Over 3-Year Span, But Would Still Fall Short of FY ‘08 Level

Governor Martin O’Malley’s recently proposed transportation funding package could eventually restore 70 percent of the annual Highway User Revenues intended to go to the state’s nearly 160 cities and towns – funding that has been almost entirely slashed over the past four years. Given critical municipal transportation needs as a result of the ongoing reductions in municipal Highway User Revenues, Maryland municipal leaders continue to advocate in support of full funding, mandated repayment of future reversions of municipal Highway User Revenues, and better protection against future raids on the transportation trust fund.

“The Maryland Municipal League appreciates Governor’s O’Malley’s efforts to introduce legislation that would restore 70% of the state transportation money designated for municipalities,” said Michael E. Bennett, President of the Maryland Municipal League and Mayor of Aberdeen. “We recognize that the administration proposal is the only viable option at this time to at least partially reinstate municipal transportation funding. While we would immediately invest the additional money in our communities, creating jobs and repairing our crumbling infrastructure, we remain concerned that even after a three-year phase-in, we would still receive less in Highway User Revenue than we did four years ago when we were last fully funded.”

MML is equally concerned that although the legislation includes protection against future revenue raids  from the State’s portion of the transportation fund and requires repayment if that occurs, this provision does not apply to the newly created fund for local government transportation monies. The League feels strongly that unless these provisions are included in the legislation, future increases in municipal transportation funding remain at risk in future years.

"The longer we wait to fully restore transportation funding to local governments from Highway User Revenues, the more it will cost taxpayers to repair and maintain our transportation infrastructure," said Scott A. Hancock, executive director of the Maryland Municipal League, the statewide association representing Maryland’s 157 cities and towns and two special taxing districts. “After so many years of underfunding, our cities and towns have a tremendous backlog of transportation projects. Last year, the legislature was able to restore additional Highway User Revenue to the municipalities  and the result of that investment is that a number of our cities and towns were able to immediately put those dollars to use on municipal road projects, which both created new jobs and revitalized a small portion of our aging infrastructure. We need to continue that progress in the best interest of the citizens we serve.”

The proposed FY 2013 state budget calls for just $6.6 million to be shared among 156 municipalities and two special taxing districts for transportation projects. In FY 2008, the last time Highway User Revenues were fully funded, cities and towns received $45 million.  Highway User Revenue, a part of the state Transportation Trust Fund, is funded through the gas tax and other transportation-related fees. It is designed to be returned to Maryland communities for ongoing transportation-related projects such as road repair, street maintenance and snow removal. Since FY 2008, the vast majority of the local government transportation fund has been diverted from cities and towns to help fill the budget gap in the State's general fund. Initially, cities and towns relied on other local funding sources to continue infrastructure maintenance projects. However, because of the unpredictability of annual State revenue sharing and increasingly drained municipal budgets, many cities and towns can no longer afford to continue roadway projects, leaving some infrastructure to rapidly erode to the point that it becomes potentially hazardous.

In FY 2012, the General Assembly approved $10 million in municipal Highway User Revenue funding, which reflected an increase of $8.4 million over what was in the Governor's initial FY 2012 budget.

About The Maryland Municipal League:

Located at the Phipps Municipal Center in the state capital of Annapolis, The Maryland Municipal League (MML) was founded in 1936 and represents 157 municipal governments and two special taxing districts throughout the state of Maryland.

A voluntary, non-profit, nonpartisan association controlled and maintained by city and town governments, MML works to strengthen and support municipal government through advocacy and the development of effective leadership. Through its membership in the National League of Cities MML offers legislative representation in Washington, urban research programs, and a national municipal government information exchange.

MML is the only statewide organization in Maryland composed solely of municipal officials and devoted to the promotion of all branches of municipal administration.