Looting the Transportation Trust... Again

In my rather lonely campaign for Delegate in 2010, I identified the looting of the Maryland state trust funds by O’Malley and his Dixiecrat machine at the statehouse as one of the top threats–-along with massive underfunding of state pension funds – to any hope for future state fiscal solvency.  At O’Malley’s urging, the General Assembly in 2009 had looted more than 57 trust funds to “balance” the 2011 budget, a blatantly sleazy accounting trick remniscent of the “securitization” of mortgage debt by Fannie and Freddie Monster over the past decade.

These funds, covering everything from the environment to public health to highway construction, set aside specific sources of tax revenue for continuing public projects of wide public benefit. 

Throughout the last decade, the General Assembly raised taxes based on the assurance that the taxes would fund these public trusts.

Here we go again.  O’Malley has just moved to transfer massive amounts of tax revenue out of the Maryland Transportation Trust Fund to “balance” the 2012 budget, taking $60 million for the general fund and $40 million  for the rainy day fund. As the Gazette reports, the Transportation Trust was created in 1971 as a dedicated source of support for MDOT and is required by statute to maintain a $100 million reserve.  The Transportation Trust funds critical projects such as highway and bridge maintenance and construction, as well as operating the MVA, the Port of Baltimore, BWI and our regional airports, and the Baltimore and Washington Metropolitan transit authorities. Funding comes primarily from the gas tax, vehicle title taxes, and vehicle registration charges.

But that’s just the law, before it gets greased by the good old boys who run the machine: O’Malley, Miller, and Busch. Reality is that between 1984 and 2004, the Dixiecrats diverted a total of $571 million to non-transportation related programs, with more than one-quarter never reimbursed. Under O’Malley, trust funds transfers metastasized:  In the past three years alone, more than $2 billion has been transferred for other budgetary purposes.

The sleight-of-hand proposed to fix this mess is a boost in the gas tax.  Now, as far as taxes go, a gas tax spreads the pain about as evenly as possible; it’s among the milder of modern instruments of fiscal torture.  But only a fool or a fellow greaser would trust this administration or the Tweeders in the General Assembly to really use gas tax revenues for highway maintenance.