Municipal and transportation finance (taxes)

This week's column by Michael Dresser, the transportation columnist for the Baltimore Sun, "Using gas tax to fill budget threatens bigger potholes," is about how there is interest in the Maryland State Legislature to increase the gasoline tax, not because of the concern about funding transportation infrastructure, but because the state needs money to close a huge budget gap. From the article:

When the legislature gathers in Annapolis each January, there is only one bill it absolutely has to pass: the budget. And according to the Maryland Constitution, the budget for what is known as the general fund must be balanced.

But the general fund budget doesn't account for all the state's needs. One of the state's most important functions — building and maintaining a system of roads, transit, port facilities and airports that can help Marylanders compete in the world economy — is financed out of another honey pot of money called the Transportation Trust Fund. ...

nothing in the Constitution requires the transportation fund to be balanced. There's no minimum level at which it must be funded. And there's nothing in the Constitution to prevent legislators from dipping into revenues that are traditionally reserved for transportation to make up for shortfalls in the general fund.

So when the budget is out of whack — as it is to the tune of about $1.6 billion this January — that pool of transportation money tends to glimmer like a mountain spring to thirsty legislators. Regularly, with the connivance of governors of both parties, lawmakers have dipped into that reservoir to borrow the money to solve what seems to be the more pressing issue of balancing the budget.

In Northern Virginia, legislators have proposed that the NoVA and Hampton Roads areas get special taxing authority to levy additional taxes for transportation projects. See "Legislative session not expected to solve Northern Virginia's transportation woes" from the Washington Post. From the article:

Del. Vivian E. Watts has lifted the hopes of Northern Virginia officials by promising to push for a comprehensive plan that would allow the region to raise and spend its own money to repair its dilapidated transportation network.

It's legislative priority No. 1 in the region. Too bad no one, including Watts (D-Fairfax), thinks the General Assembly will pass the bill.

Yet some delegates also think this year's legislative session could be pivotal in shifting the debate over transportation funding and the traditional balance of power between Northern Virginia and the rest of the commonwealth. Thanks to sweeping demographic changes recorded by the 2010 census, Northern Virginia's influence in the legislature is expected to grow, perhaps clearing the way for transportation solutions that have eluded the region for years.

In New Haven, Connecticut, Mayor John Stefano has suggested that the state's big cities get the authority to keep any additional sales taxes that are levied by the state in any increase. From "New Haven Mayor John DeStefano Jr. sets 2011 priorities, steps up for big cities" in the New Haven Register:

Mayor John DeStefano Jr. wants the state to help the three major cities by allowing them to keep any additional sales tax revenue generated within their borders, if lawmakers increase the rate this session.

In unveiling his legislative agenda Tuesday, DeStefano said Hartford, Bridgeport and New Haven are at the breaking point given the large amount of tax-exempt properties within their borders, demand for social services they have to meet and lack of revenue-generating options beyond property tax.

The Florida Public Interest Research Group did a study on gasoline taxes and whether or not current rates "pay for the roads."

-- Do Roads Pay for Themselves? Setting the Record Straight on Transportation Funding

And in Dr. Gridlock's roundup of the top ten transportation issues of 2010:

1. Snow cleanup
2. Metro fare increases
3. leadership turmoil
4. Tysons traffic
5. Metro bag inspections
6. Busted escalators
7. DC bike lanes
8. Rockville Pike Interchange
9. Fairfax County Parkway Extension
10. Commuter Train Troubles

I was surprised that he didn't include in the list how Alexandria has passed a transit property tax levy to fund the creation of an infill subway station at Potomac Yard ("Dr. Gridlock - Potomac Yard Metro vote passes"), and that Alexandria is considering a tax for transit infrastructure on commercial property (see "Your View: Why we need an add-on tax" from the Alexandria Times and "Alexandria may tax commercial property to pay for roads" from the Washington Examiner).

Many jurisdictions assess infrastructure impact fees on new construction. Montgomery County, Maryland has such fees for schools and transportation.

-- Development Impact Tax Schedule, Montgomery County, Maryland