New Maryland law sends more money to local roads

The days of local governments in Maryland cutting back on road work should soon be in the past.

At one time, nearly one-third of the state’s highway user revenue was routed to counties and municipalities for road projects. Highway user revenue is made up largely of fuel taxes and vehicle fees.

In 2010, state lawmakers raided the Transportation Trust Fund to help shore up the state’s general fund. At that time the formula was changed to allot about 8.5 percent of highway user revenue to local governments.

Combined with fewer tax dollars following the Great Recession, the revenue spigot for local governments was nearly shut off.

Since that time, legislators and Gov. Larry Hogan have approved efforts to gradually bring back more transportation money to local governments.

The governor signed into law a bill to require all fuel tax revenue to be held in the Transportation Trust Fund. The General Assembly previously approved HB807 by unanimous consent.

Municipalities’ share of revenue via the state’s fuel tax will be increased by as much as 2.8 percent. Local governments could only use their share of highway user revenues for authorized purposes related to transportation infrastructure construction and maintenance.

The new law also changes the way the Maryland Department of Transportation allocates fuel tax revenue. Specifically, the agency will provide to local governments capital grants based on the amount of revenue in the roads account.

The rule change takes effect at the beginning of fiscal year 2020.

To view other legislative activities of interest for Maryland, click here.