NFCCA

Stories from the NFCCA Newsletter, the “Northwood News”

Northwood News ♦ June 2015

How Much Would You Be Willing to Pay for Transit?

By Jim Zepp

The County is currently pursuing a large number of transit projects (the Purple Line light rail, the Corridor Cities Transitway, and 10 Bus Rapid Transit routes) as well as a new six-mile highway (the M83) that will each cost billions of dollars to construct, maintain, and operate.  Competing with these new projects for funding are existing roads and bridges in the County that need repairs and replacement as well as the regional WMATA subway and bus services and the County’s Ride On local bus service.

In addition, there are other community needs — such as schools, public safety, health care, affordable housing, libraries and cultural facilities, and parks and recreation — to consider in terms of what County taxpayers are expected to fund through their income and property taxes.  The County is at its maximum limits for income and property taxes, which County Director Joe Beach described as being “under pressure” in terms of adding more expenditures and looking for new revenue sources to maintain current obligations.

The County Executive’s recommended operating budget for Fiscal Year 2016 (which starts on July 1, 2015) is $5.1 billion.  As a point of comparison, the State of Delaware’s FY2016 recommended operating budget is only $3.9 billion.  How this affects individual County households is illustrated in the charts below.

The Tax Foundation (taxfoundation.org) prepares annual comparisons of the relative tax burdens for each of the states.  In its most recent report, Maryland is considered to have the 40th worst business tax climate.  However among the different types of taxes included in this analysis, the two main categories driving this ranking are personal income taxes (46th worst) and property taxes (41st worst) and not those taxes normally associated with businesses.

The Independent Transit Authority

Since both Federal and State funding for transportation and other public facilities and services are also being constrained, the County is challenged to find funding for all of the new transit projects that it wants to build.  Consequently, the County Executive requested new state legislation (MC-24-15) last January that would allow the County to create an Independent Transit Authority (ITA).  This new agency:

Oversight by the County government would be limited to approval of the ITA’s capital improvements budget, but specifically not the ITA’s operating budget.  It is unclear whether the County Inspector General would have the authority to investigate the ITA.  The County’s union employees, who operate the Ride On buses, would be transferred to the ITA.  After their current contract expired, the union would be subject to whatever it would negotiate with the ITA.

A public hearing for the ITA bill was scheduled by the County State Legislative Delegation one week after its introduction on the following Friday.  Due to requests by citizens, the hearing was moved from Annapolis to Rockville and rescheduled from Friday afternoon to Friday evening.  Despite this short notice, the Council’s auditorium was filled to standing room only as citizens and union members turned out to protest the bill’s provisions.  It became apparent that this proposal had been introduced without any input by the County Council, the union, or the public.

Consequently, the County Executive responded to this outpouring of opposition by withdrawing the bill for that Legislative Session.  However, he also declared his intention to submit the ITA bill in next year’s session if there are no other alternatives identified for funding the planned BRT routes.

The Transit Task Force

To this end, on April 6th, the County Executive reactivated the Transit Task Force that in 2012 had originally recommended the 164-mile BRT network covering 26 major roadways.  This was subsequently reduced by the MNCPPC Planning Board and County Council to 82 miles and 10 routes.

Several new members were added to the revived Task Force — including myself — to slightly broaden its representation beyond various public officials and advocates for the BRT.  Its purpose is to consider possible improvements to the previously proposed ITA legislation that would improve its chances of passage, study other funding alternatives for the planned BRT routes, and provide some opportunities for public input on the proposed ITA and BRT funding.  The Task Force or its two working groups will be meeting almost weekly through the summer with the goal of producing a final report to the County Executive by September 30, 2015.

Jerry Garson, the Montgomery County Civic Federation’s Transportation Committee Chair and a CPA, has calculated the likely impact on individual property tax bills for building the various BRT and Corridor Cities Transitway using the most recent cost estimates for these projects, shown in the table below.

Potential Cumulative Impact of BRT Projects on Real Property Taxes
 
Proposed BRT Projects
Estimated Construction CostsEstimated Annual Cost to Real Property Taxpayers% Annual Increase in Real Property Tax
Rockville Pike, Viers Mill Road, and Colesville Road BRT Routes$1.8 billion$234 million15%
Plus Corridor Cities Transitway (CCT)$3.6 billion$429 million27%
Plus Seven Other Planned BRT Routes$4.7 billion$589 million37%
Notes:
  • The above estimates do not include any operating costs for the BRT routes or costs associated with the Purple Line.
  • Research on major public works projects have found that most cost estimates tend to be substantially less than the actual construction costs.  “Cost overrruns in the order of 50 percent in real terms are common for major infrastructure, and overruns of 100 percent are not uncommon.” — Survival of the Unfittest:  Why the Worst Infrastructure Gets Built [oxrep.oxfordjournals.org/content/25/3/344.short]

Other factors that could substantially increase these figures include:

There will be a public meeting where citizens can express their concerns about these issues.  Information about the Transit Task Force, meeting dates and agendas, and materials can be accessed at www6.montgomerycountymd.gov/Apps/cex/transit2015.

If you want to speak about how much you are willing to pay for all of this, please attend.   ■


   © 2015 NFCCA  [Source: https://nfcca.org/news/nn201506c.html]