Time: 9:00 – 10:30 AM
Location: Campaign Consultation, Inc. (1001 N. Calvert Street)
Attendees:
Klaus Philipsen, Brian Greenan, Art Cohen, Paolo Harris, Hans Mayer, Peter Duvall, Sandy Sparks, Jeff LaNoue, Brian O’Malley
Financing Options for Transit Projects – Hans Mayer
Trends to be aware of:
- Nationally transit ridership is up and vehicle miles travelled is down. In Baltimore, 13 percent of the land is tax exempt. 40 percent of the transit projects in the U.S. are supported by sales tax. Titling fees are another source.
- Existing and potential revenue sources for Baltimore City
- Baltimore City receives approximately $40 million or 7.75% of the highway user revenue annually from the State of Maryland for road and highway maintenance. The City has the option to issue general obligation bonds, parking authority bonds, and tax increment financing bonds.
Other options
- Some jurisdictions use value capture to finance projects. Some use a gas tax increase. Some use a regional sales tax. St. Louis and Denver are examples where a regional sales tax funds transit. Federal programs including Congestion Mitigation and Air Quality (CMAQ) and TIGER (Transportation Investments Generating Economic Recovery) have funded projects in Maryland.
ICC example
- The InterCounty Connector (ICC) was partly financed through GARVEE (Grant Anticipation Revenue Vehicle) bonds. Using GARVEE bonds allowed the Maryland Transportation Administration to borrow more despite already being close to the 10 to 1 ratio of debt versus anticipated revenues that has been the threshold for using its traditional method of simply bonding against anticipated toll revenues. The GARVEE bonding was made possible through the U.S. Department of Transportation’s TIFIA (Transportation Infrastructure Finance and Innovation Act) program. The TIFIA program provides loan guarantees that help projects of regional or national significance get financing.
Questions that arose during the discussion
1. Can funds be transferred between the Maryland Transportation Trust Fund (which collects funds from the gas tax, tag and titling fees, corporate income tax and state sales tax) and the Maryland Transportation Authority (which collects funds from tolls and bonds issued against future toll revenues)?
2. What was the source of funding for the Maryland Transit Administration’s hybrid bus fleet upgrades? Was it TIGER?
Ideas for future meetings
The consensus of the group was that it would be helpful to spend more time discussing how transportation projects get funded. In particular the group had three suggestions for upcoming meetings:
1. The Consolidated Transportation Program (CTP) – what is it? how does it get put together? How does it get approved? how to read it? what it tells us about state spending priorities?
2. Pros and cons of a regional transit authority versus a transit administration that’s part of a state agency. Why are some people in Massachusetts trying to change the MBTA to a state administration? What other national examples are worth looking at (Rhode Island, Delaware, New Jersey)?
3. Case studies of how certain transportation projects got funded.