Column on Funding Transit and Closing Deficit

I have a column out today about how to close the state’s looming budget deficit while at the same time providing more stable funding for public transit.  Although this is a Maryland proposal, I would suggest something similar for the Federal Government.  I’m pasting it below along with sources.  I just noticed they really badly got my e-mail wrong.  Oh well.  It’s mdernoga@umd.edu

Transit: Tax gas

MATT DERNOGA

To the applause of mass transit advocates, Gov. Martin O’Malley announced his support for the light-rail option of the Purple Line on Aug. 4. While completion of the Purple Line sometime late next decade will be a positive step forward for our state, the cuts to transit in the last year alone amount to a comparable step backward.

This past April, cuts were made to Metrobus routes that run through and around the campus. When the state had to cut $1.1 billion of transportation funding last fall, tens of millions were cut from engineering work on the Corridor Cities Transitway, a lesser-known proposed mass transit link within Montgomery County’s Interstate 270 corridor. The state canceled a planned contribution to local efforts to extend light rail from the Branch Avenue Metro station to Waldorf. MARC train and commuter bus services all around the state were scaled back or eliminated.

It recently came to light that another $700 million worth of state budget cuts are on the way thanks to slumping revenues, so there will be plenty more to complain about. The point is that advocates for the Purple Line should celebrate their progress, but look around and realize if in 10 years there is only one light-rail system connecting two counties, we’ve lost.

The state will face a lot of tough choices on how to make up the budget shortfall. It comes down to two options, cut spending or raise taxes. I despise government waste, but the state has already had to cut several billion dollars out of the budget. All the fat has been trimmed, and we’re now scraping bare bones. Taxes hurt, but cuts to essential services, including the brittle legs holding up what’s left of our transit system, will hurt far more.

To help reconcile the persistent lack of funding for transit and the immediate budget shortfall, Maryland should make two changes with our source of transportation funding, the gas tax. First, raise the gas tax. It has stayed at 23.5 cents a gallon since 1992, and should at least be raised to keep pace with inflation. Second, redirect the revenue from the gas tax to the general fund, rather than having a separate transportation fund. One of the big reasons we’ve had revenue shortfalls is the price of gas was about $4 last summer, which massively curtailed gas consumption.

Expect a future of peak oil, increased fuel economy standards and plug-in hybrids. Expect falling gas consumption as the years pass, which will mean less revenue. Even if we do nothing, we’re eventually going to be forced to tap the general fund to fund transportation. We might as well fix the problem now so we don’t have to cut billions of dollars worth of road and mass transit funding due to unanticipated and underestimated shortfalls.

We’d also correct a flaw in our transportation funding structure. Right now, our source of funding is dependent on us buying gas, contrary to the mass transit’s goal of decreasing gas consumption. This backward incentive to build roads is a reason why roads get such a disproportionate amount of funding compared to mass transit. By raising the gas tax and redirecting its revenue to the general fund, we’ll ease the pain of coming budget cuts and provide stabler funding for mass transit in the years to come.

Matt Dernoga is a senior government and politics major. He can be reached at dernoga@umdbk.com

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/04/AR2009080402766.html (O’Malley backing Purple Line)

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/10/AR2008091001812.html (1.1 billion in cuts)

http://greatergreaterwashington.org/files/2009/transitfirst20090402.pdf (Metrobus cuts to UMD)

http://voices.washingtonpost.com/getthere/2008/10/maryland_to_cut_transit_servic.html (MARC+commuter bus cuts)

http://www.washingtontimes.com/news/2008/may/24/little-support-for-plans-to-give-drivers-gas-tax-h/ (info on gas tax)

http://www.fredericknewspost.com/sections/business/display.htm?StoryID=91811 (better info on gas tax)

http://www.mddailyrecord.com/article.cfm?id=11961&type=UTTM (700 million in cuts)

Australian Climate Bill goes Down in Flames(for now)

Back in June, I made a post on Australia’s political situation regarding their climate bill.  Here is part of what I said….

“The Prime Minister Kevin Rudd ran on a platform that included taking action on climate change, and he’s put forth a cap and trade plan, but it’s only  5% reduction below 2000 levels by 2020, but Australia is willing to go as far as 25% if other nations step up in Copenhagen.  It’s passed out of Australia’s House, but is facing huge problems in the Senate.  The labor party can’t pass the law on its own, and the conservatives are vowing to fight it and kill it.  However, in Australia they have a 3 party system, and the 3rd party is the Greens party, which is strongly pro-environment.  If the Greens party teams up with Labour, they can pass the bill.  However, the Greens are saying that 5% is too weak, and they cannot support it.  Right now, their position is 25% or bust.  If this position holds, we’re going to see a very comparable result as we would see in the United States if the liberal members of the Democratic party listened to their base and voted no because the bill wasn’t strong enough.  Would the result be a stronger bill, or an empty sheet of paper in Copenhagen?  Of course, Australia has an advantage in that if their bill fails twice, they can call elections and have the people kick out the troublemakers.  Let’s see what happens to the bill.  In my opinion,  it will give a good indication of what would happen here.”

The vote has been cast, and the neither the Greens or Labour agreed to budge.  The bill just failed.  However, as I noted above, because of how Australia’s political system works, if Labour re-introduces the bill again and it fails, here is what will happen…

“If the Senate blocks or rejects the legislation a second time, after an interval of three months, it will hand Prime Minister Kevin Rudd a trigger for an early election. Rudd remains well ahead in opinion surveys.  With polls showing most Australians favor action to combat climate warming, Rudd’s Labor has promised emissions cuts of 5-25 percent on 2000 levels by 2020, with the higher end dependent on a global agreement at the Copenhagen talks to replace the U.N.’s Kyoto Protocol.”

“Environment groups said the failure of the legislation left the world in a more vulnerable position in lead-up negotiations to the Copenhagen meeting.”

I read a great explanation on Grist from Todd Woody of what happened in Australia, and what will likely happen next.  Read it here.