Traffic on the American Legion Bridge between Maryland and Virginia. The former Hogan administration proposed using a public-private partnership to help pay for replacement of the bridge, an approach that needs to be reconsidered, writes Ed McDonald. Photo by Chip Somodevilla/Getty Images.
Maryland is reliant on motor fuel taxes, various vehicle fees, federal funds and tolling to address its transportation infrastructure needs. But since 2020, revenues from the motor fuel tax have been in decline due to the COVID-19 pandemic and a shift towards more fuel efficient, hybrid, and electric vehicles. Federal funds are reduced, and the Maryland Transportation Authority, which has insurance for its loss of toll revenue due to the collapse of the Francis Scott Key Bridge in Baltimore, may face the loss of millions of dollars to rebuild the bridge.
According to a 2022 Maryland Department of Transportation report, Maryland will face an ~$2.3 billion revenue shortfall over 10 years and nearly $1.7 billion in immediate infrastructure repairs and replacements. That was well before the devastating loss of Key Bridge in Baltimore last year, which remains unfunded. This, combined with the 63% rise in construction costs since 2019, according to the National Highway Construction Cost Index, has led the state to a crash course and a need to explore new paths for funding.
In 2023, lawmakers established the Maryland Commission on Transportation Revenue and Infrastructure Needs’ (TRAIN) interim report to address revenue shortfalls. And while their 2023 interim report addressed some of the issues, we have a long way to go.
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This month, TRAIN is required by law to submit its final report. While there have been no public meetings in 2024, the final report will be critical to state lawmakers as they grapple with the lack of funds, an unfunded bridge collapse in Baltimore, growing capacity issues and aging bridges. The state must look at all options including user-based fees, changes in the gas tax, sales taxes, tolling and private investment.
However, one option that should never be on the table is reducing payments made to counties for their transportation infrastructure needs. Maryland counties have no means to collect revenue for transportation infrastructure projects. While they are responsible for 70% of the roads and bridges in our state, they are nearly 100% reliant on state dollars to cover their maintenance costs.
Drivers and taxpayers are ultimately going to pay to replace or rehabilitate deteriorating infrastructure. It is just a matter of how it is arranged. While tolls are nearly always controversial at first, consumers are more willing to accept them when they are used entirely to maintain and upgrade the facility. Unfortunately, Maryland policymakers have a history of raising tolls and raiding those funds to pay for new pet projects — like transit. As a result, constituents do not trust policymakers when they talk about tolls and toll increases.
An alternative is private partnerships. Private partners that have funds available to invest, and a track record of delivering and operating projects, can greatly accelerate delivery and bring a large economic investment, often hundreds of millions of dollars into the local economy.
While it means tolling, the private partner will be contractually bound to maintain the facility and incentivized to make the user experience as friendly as possible.
It takes the politics out of transportation projects.
During Gov. Larry Hogan’s administration, we supported efforts to replace the American Legion Bridge and add lanes to the Interstate 495 Capital Beltway through a public-private partnership. This solution would have met several needs of the state and the community, including reducing traffic congestion with the state shouldering a small percentage of the cost burden.
A similar model could be used for a new Chesapeake Bay Bridge among several other major road and bridge projects across the state.
As state policymakers move forward in determining how to address the transportation crisis in Maryland, I strongly encourage them to once again look at how the private sector can put billions of dollars to work to meet the dire transportation needs of our state. Private industry investment is a way to accelerate infrastructure projects without placing the full financial burden on Maryland taxpayers.
Without the help of private industry, our transportation infrastructure will continue to crumble and the safety of our roadways will be in peril.