Motorists in Maryland could be looking at a toll increase four years sooner than expected as the result of toll reductions that begin to take effect on July 1.
Briefing documents on the toll reductions that were presented to the Maryland Transportation Authority Board in May show that the reductions championed by Gov. Larry Hogan have moved up the projected timeline for the next toll increase by four years. The 49-page document was obtained by The Daily Record under a Maryland Public Information Act request.
The briefing document shows that prior to the approval of the reductions, the authority anticipated that it would need to seek an increase in 2028. The now-approved reductions have moved that timeline up to 2024, according to the report. The dates in the report are authority projections and do not include anticipated increase amounts or which facilities would be affected.
The issue of future toll increases came up Tuesday when Transportation Sec. Pete K. Rahn and Maryland Transportation Authority Executive Director Bruce W. Gartner briefed members of the Senate Budget and Taxation and Finance Committees during a joint hearing.
“Inevitably, there will be a need for a new toll increase,” said Sen. Richard S. Madaleno, D-Montgomery and vice chairman of the Senate Budget and Taxation Committee. “That date moves up.
“You are gifting a toll increase to your successor just like Governor O’Malley was gifted a toll increase by his predecessor,” Madaleno said to Rahn.
Rahn, in speaking to the committee, did not specifically address the report from his agency and couched his response in terms of the need for an increase if and when new projects such as the replacement of the 74-year-old Harry W. Nice Bridge in Charles County moves into the construction phase.
“The need to raise tolls is really a conversation that’s going to have to be discussed and whether it in fact it is necessary or whether there is available debt at that that time that can be sustained by the authority,” Rahn said. “All of those decisions really have to await until there is a design for a Nice Bridge and a cost associated with that. And so, until then, it’s just pure speculation as to when something like that would have to occur.”
— Larry Hogan (@LarryHogan) June 11, 2015
Following the hearing, Rahn repeated his assertion that the decrease does not change the timeline for an increase.
“I would say ‘No, it does not,'” Rahn said. “What we look at is the resources that we have in place after the toll reduction to accommodate everything that was anticipated — the planning and design of the Nice Bridge and the maintenance of our system. So, there’s no reason to assume that tolls are increased at any point until we know what the financial costs are of the Nice Bridge, is there a decision to move forward, are there alternatives available through financing. Nothing we have done puts in place a mandatory increase in tolls.”
But the authority’s 49-page financial review of the toll reduction, and a review by the Department of Legislative Services, shows that the agency will walk up to the edge of a number of financial requirements including those set for cash balance and debt service ratio.
When asked about the briefing document, Rahn acknowledged that it did appear as if the authority was projecting the need for a toll increase in 2024 rather than in 2028.
“So much of this is projections,” Rahn said of the month-old internal document. “These have changed as we’ve gone forward, as we have more information about finances. So, any of these projections, when you’re talking 2028, you’re guessing.
Rahn referred questions to Gartner, the executive director of the authority.
Gartner downplayed the projections made by his agency calling it “a one-time snapshot” and adding that the potential for toll increase fell outside its six-year planning period.
“It’s talking about the best guess at the time. It’s the earliest that you could possibly need it,” Gartner said. “What the committee was assured of was about a (six year) program period plus some so the statements made to them were correct in terms of what you look at in the program period plus some. The fact that it’s in the out years, that’s a pretty distant process for us. You always have planning documents. The board wants to get a sense that it’s not moving up too far and they’re going to have to do something before they’re ready to.”
Madaleno stopped short of criticizing Rahn’s answer.
“I think that maybe he needs to go back and review that document to see,” Madaleno said. “In fairness he may have just been looking at a six year or eight year horizon.”
The Montgomery County Democrat said the agency is trading off reserves intended to offset the cost of projects such as the replacement of the Nice Bridge for a short-term political gain that comes with toll reductions.
“He’s left it up to his successor that if we are ever to approach one of these substantial mega-projects again, it will require a toll increase so large it probably would not be politically feasible,” said Madaleno said of Rahn. “He’s constrained the future of southern Maryland to meet his short term political goals.
“That’s the sign of a really shrewd politician and the sign of, I think, a short-sighted governor,” Madaleno said.