Analysts: Transportation fund has big problems

The state’s transportation fund might never get the money it was promised from a sales tax hike in 2007. At least, that’s what legislative analysts are recommending.

Fiscal analysts told the Senate Budget and Taxation Committee Wednesday that they should consider eliminating a boost in sales tax revenue for the Transportation Trust Fund in 2014. Nearly $6o million would go to the state’s general fund instead.

A larger portion of the proceeds from the sales tax was supposed to go to the transportation fund immediately after the rate was boosted from 5 to 6 percent. But lawmakers diverted the money to the general fund in 2008 during a series of budget shifts to replace an unpopular tax on computer services.

Transportation Secretary Beverly Swaim-Staley said her department opposes the moves, but it is more concerned about navigating the next three years. The department has planned on the extra revenue in its six-year spending plan.

“That’s 2014,” she said when asked about the proposal, “and we are focused on getting through this strain one year at a time.”

The Transportation Department has other problems, as outlined in the legislative analysis. These include stagnant vehicle titling tax revenues, unfunded plans for transit lines in Baltimore and the Washington suburbs, and mounting snow removal costs.

Swaim-Staley said the department has spent about $54 million on snow removal so far, and has about $60 million to spend for the year.

Here’s the killer line from the report:

“Titling revenue estimates may be ambitious, federal authorizations are likely to decrease significantly absent federal tax increases, there is no additional state debt capacity, and debt service coverage levels remain below administrative levels and close to the minimum required in bond covenants,” The analysis reads. “The operating budget appears understated relative to actual experience, particularly for snow removal and transit operating costs.”