Commission on

Transportation

Investment

Final Report

December 1, 1999

Commission on Transportation Investment

Membership

Co-Chairmen

Mr.John P. Davey Mr.William K. Hellmann

O’Malley, Miles, Nylen & Gilmore Rummel, Klepper & Kahl

Members

Mr. B. Tyrous AddisonMr. Ronald M. Kreitner

Atlas Insurance CompanyDirector, Maryland Office of Planning

Mr. Cleatus E. BarnettMr. Laurence Levitan

Director, Washington MetropolitanRifkin, Livingston, Levitan and Silver

Area Transit Authority

Mr. Donald M. BowmanSenator Martin G. Madden

DM Bowman, Inc.Maryland General Assembly

Delegate K. Bennett BozmanSenator Thomas M. Middleton

Maryland General AssemblyMaryland General Assembly

Senator Ulysses CurrieMr. Ralph E. Moore, Jr.

Maryland General AssemblyVice President Community Services

Center for Poverty Solutions

Mr. Stephen J. Del GiudiceSenator Robert R. Neall

Frederick R. Harris, Inc.Maryland General Assembly

Delegate Thomas E. DewberrySecretary John D. Porcari

Maryland General AssemblyMaryland Department of Transportation

Ms. Erin M. FitzsimmonsSecretary Frederick W. Puddester

City Council, Town of Ocean CityDepartment of Budget and Management

Mr. Donald C. FryDelegate Howard P. Rawlings

Greater Baltimore CommitteeMaryland General Assembly

Mr. James M. HarkinsSenator Ida G. Ruben

Harford County ExecutiveMaryland General Assembly

Delegate Sheila E. HixsonMs. Michele K. Ryan

Maryland General AssemblyMaryland Aviation Commission

Senator Barbara A. HoffmanMs. Dru Schmidt-Perkins

Maryland General Assembly1000 Friends of Maryland

Mr. Jack KinstlingerHouse Speaker Casper R. Taylor, Jr.

KCI Technologies, Inc.Maryland General Assembly

Delegate Robert H. KittlemanMr. David L. Winstead

Maryland General AssemblyWilkes, Artis, Hendrick and Lane

Commission on Transportation Investment

Table of Contents

Final Report

Appendix I

Appendix II

Appendix III

Meetings

Commission on Transportation Investment

Final Report

House Joint Resolution 6

The transportation system of Maryland is funded entirely by the Transportation Trust Fund, which is independent of the General Fund. The largest source of revenue dedicated to the Transportation Trust Fund, the motor fuel tax, is not sensitive to inflation, thereby creating a revenue shortfall once system preservation and improvement needs begin to outpace revenues. For this reason, the Governor and General Assembly requested recommendations from the Commission on:

  • The magnitude of system preservation and unmet transportation needs that must be funded if the State is to enhance and maintain a viable transportation system.
  • The appropriate level of funding necessary to support a viable transportation system that is within the abilities of the Maryland Department of Transportation to administer.
  • The development of a comprehensive, long-term solution that generates revenues sufficient to maintain a viable transportation system and meets the long-term funding needs of mass transit.

Findings

  1. Current trends indicate that dramatic growth and shifts in where people live and work will continue to put pressure on the State’s transportation network over the next 20 years. By the year 2020, Maryland’s population will increase by one million to a total of six million citizens, there will be 700,000 more jobs in the State, and vehicle miles traveled in Maryland will increase from 48 billion to 68 billion, twice the rate of the population increase. The congestion resulting from the growth of vehicle miles of travel will impact not only the movement of goods throughout the state, but daily commutes to and from work, household errands, and social activities.
  1. The State is continuing to look for ways to make existing facilities more efficient, such as, utilizing advance technologies to increase effective capacity, improve performance, heighten safety, and enhance quality. However, due to rapid growth in demand and financial and environmental constraints, it is clear the State cannot rely entirely on adding capacity to try to build our way out of congestion. Initiatives to reduce the demand for transportation facilities include Smart Growth land-uses that provide pedestrian/transit choices, along with economic incentives promoting sound travel decisions.

2Commission on Transportation Investment

  1. Enhanced access to the State's market place through the port, airport and rail freight services are critical to attracting and retaining businesses, and increasing employment opportunities. Possibilities such as Maersk/Sealand, and growth in automobile and roll-on/roll-off business will increase cargo handling at the port by more than four million tons by as early as 2005. BWI airport passengers will double to 30 million per year in the next 20 years and new mid-field air cargo facilities will move a greater share of the bulk cargo market to the airport. Rail freight services will continue to provide a competitive intermodal link for the movement of goods between rail, highway, sea, and air.
  1. Congested highways, failed intersections, crowded buses, deferred transit maintenance, and the constraints of shared rail facilities will hamper the State's economic development goals and further erode our citizens' quality of life.
  1. As presented by the Maryland Department of Transportation (Department), there is a minimum of $27 billion ($25.5 billion capital projects and $1.5 billion transit operating expenses) in transportation needs in excess of available funds (unmet needs) over the next 20 years. These needs include Transit Advisory Panel recommendations to increase transit ridership and expand transit service, projects currently in the Department's Development & Evaluation highway program, initiatives to retain competitive advantage in the port, rail freight and airport industries, and technological improvements to the existing driver and vehicle licensing systems. However, these needs exclude extraordinary opportunities such as Maersk/Sealand or Magnetic Levitation. See Appendix I for a breakdown of the needs by modal administration.
  1. The $27 billion of unmet needs is not unreasonable, and may be understated as the long-range projections give way to reality. A change in any of the following assumptions may significantly impact the funding available to meet transportation needs. Department operating expenditures may grow faster than projections, federal funding may not continue at its historical 2% level of growth, and the economy may experience periods of instability. In addition, the Transit Advisory Panel report contains only a portion of the recent Washington Metropolitan Area Transit Authority's 25-year "Transit Service Expansion Plan".
  1. Traditional transportation funding sources cannot produce sufficient revenue to meet the transportation needs of the next 20 years. Total revenues are projected to grow at 2.5% annually while operating expenditures grow at 4.6%, reducing the funds available for capital projects over time. The majority of those remaining funds will be used for system preservation, which grows at 3% per year, further reducing the funding for new capital expansion projects.

Final Report 3

  1. Identifying alternative funding sources and expansion of existing sources will be necessary to generate sufficient funding to meet the State's long-term transportation needs. See Appendix II for a listing of funding options.
  1. Despite significant contributions from the State and Federal governments, the local jurisdictions report that a gap remains between current funding levels and those necessary to adequately maintain county roads and bridges. Although differences in pavement life cycle and maintenance strategies exist, all of the counties have system preservation needs that exceed available revenues.

Recommendations

  1. System preservation, safety enhancements, and improved capacity for pedestrians, bicyclists, transit riders and motorists should remain the highest funding priority. Therefore, available resources should be used to reduce congestion, promote alternatives to reduce growth in vehicle miles of travel, implement Smart Growth strategies that offer travel choices, foster livable communities, and promote economic opportunities throughout the State. The Department should consider ways to reduce new capacity demand, increase funding of congestion management, and improve transportation facilities to support the long-term objectives of Smart Growth. Future Consolidated Transportation Programs should continue to emphasize a multi-modal approach that encompasses all modes of transportation.
  1. The Department should be as efficient as possible to reduce growth in operating expenditures throughout all modal administrations. As part of its annual presentations to the budget subcommittees, the Department should report on its initiatives and strategies for enhancing operating efficiencies.
  1. Transit projects and services should be expanded to meet the goal of increasing patronage from 570,000 to one million riders a day by 2020 in accordance with the 10 recommendations of the Transit Advisory Panel (See report in Appendix III). The Commission believes that increasing transit ridership over the next 20 years is essential to meet the mobility challenge facing the State. Creating the capacity and providing the expanded service to reach the goal will cost approximately $1.1 billion annually for preservation, operating, and capital expansion. The estimated additional cost of $300 million per year should allow transit to maintain its 5% share of all travel trips.

4 Commission on Transportation Investment

a)The goal of at least one million riders a day should be met by preserving and improving the existing systems, expanding service where viable to unserved areas such as the Eastern Shore and Western Maryland, and encouraging transit supportive policies. New rail lines and busway projects proposed by the Transit Advisory Panel should be developed to maximize potential ridership, to provide an alternative to the single occupant vehicle and to encourage welfare to work efforts. Subsidized small vehicle shared ride service should be considered if it can provide better on-demand service at lower cost than traditional transit service. Similarly, system improvements that are multi-jurisdictional in scope to link job centers with employee populations, regardless of county of origin/destination, are to be encouraged.

b)The 50% farebox recovery mandate should be replaced with objective performance indicators and management audits. The four indicators are operating expense per vehicle mile, operating expense per passenger trip, passenger trips per vehicle mile and a farebox recovery floor of 40% with a target goal of 50%. The farebox recovery change, State financial support, and service policies should be applied equitably to the Baltimore Metropolitan Transit District and Washington Metropolitan Transit Authority.

c)The Governor and Legislature should support transit operating and capital budgets that begin the implementation of Transit Advisory Panel proposals.

d)New transit service should be excluded from the farebox recovery calculation during the first 18 months of service.

  1. The current level of capital investment should be increased by $100 million for each of the next four years in order to reach a $1.5 billion level of capital investment in fiscal year 2004.

a)The increase over the next four years will provide the Maryland Department of Transportation an opportunity to plan for the higher spending levels necessary to support the proposed longer-term level of investment.

b)The Department should implement strategies to assist in the delivery of the larger capital program level. Such strategies may include judicious use of design-build contracts for selected projects, use of public/private partnerships, increased use of consultant design and construction management contracts, increases to staff capacity, incentives to retain experienced staff, and streamlined procurement and contracting processes.

Final Report 5

  1. The $1.5 billion level of capital investment should be increased by 4% each fiscal year after 2004 to account for inflation and further reduce unmet capital needs. This level of funding will address about 70% of the $27 billion in unmet transportation needs over the next 20-year period.
  1. An effort of this magnitude will require additional State funding of approximately $650 million per year. Because traditional revenue sources cannot provide sufficient revenue to meet the needs of the State, counties, and municipalities, it will be necessary to expand the sources of revenue available for financing transportation beyond the existing gas tax and titling fees. Consideration should be given by the Administration and General Assembly to other potential sources of revenue, such as:
  • Expanding the sales tax base;
  • Increasing the sales tax rate;
  • Using existing general funds;
  • Imposing transit taxes;
  • Implementing congestion pricing; and
  • Increasing the gasoline tax and possibly making it sensitive to inflation.
  1. Since State spending limits restrict the use of surpluses in operating programs, the legislature is encouraged to utilize General Fund surpluses to finance appropriate capital transportation needs, such as the replacement of the Woodrow Wilson Bridge.

Commission on Transportation Investment

Appendix I

Maryland Department of Transportation

Unfunded Capital Needs

FY 2001 - FY 2020

Commission on Transportation Investment

Appendix II

Revenue Enhancement Options

Commission on Transportation Investment

Appendix III

"The Future of Transit in Maryland

One Million Riders a Day by the Year 2020"

Report of the Transit Advisory Panel

January 1999

Commission on Transportation Investment

Meetings

August 2 / The Business of Transportation in Maryland
Port
Rail Freight
Aviation
August 16 / The Business of Transportation in Maryland
Highways
Motor Vehicle Administration
August 30 / The Business of Transportation in Maryland
Transit
September 13 / Intermodal Planning Overview
Local Perspective on Transportation Needs
Maryland Association of Counties Panel
Maryland Municipal League Panel
September 27 / Draft Consolidated Transportation Program Overview
Long-range Transportation Revenue Forecast
Long-range Transportation Capital Needs
Optional Capital Spending Levels of Effort
October 20 / Public Hearing
November 1 / Alternatives to Farebox Recovery Mandate
Group Discussion
November 22 / Findings and Recommendations