Sen. Jennings: July 1 Toll Reductions Will Have No Effect on Road Projects, Bond-Rating, or Maintenance and Safety Standards

From state Sen. J.B. Jennings:

Toll Reductions

Governor Hogan’s recent toll cut was not just keeping a campaign promise to lower Maryland’s excessive tolls. Most importantly, it was a well-reasoned, fiscally sound plan to put more money back in the pockets of bridge, road and tunnel users. The reduced tolls, which become effective July 1 is expected to save Marylanders approximately $270 million over the next five years.

Testifying before the Senate Budget & Taxation and Senate Finance Committees, Transportation Secretary Pete Rahn said the Transportation Authority would maintain a $350 million cash balance that would be a “substantial buffer for any unanticipated expenses in the maintenance of the Authority’s eight toll facilities.”

The Governor has a simple, straight forward rationale for the toll cuts. He believes it is more important to put the money in the pockets of hard-working Marylanders than to keep it on the balance sheet of the Transportation Authority. I couldn’t agree more. Completely unaccustomed to such a belief being put into practice, skeptical legislative leaders called for a hearing to determine what effect the toll cuts would have on future projects and keeping our prized Triple “A” rating, the top score achievable for an agency whose debt is not secured by the state’s full faith and credit, for Maryland Transportation Authority’s Transportation Facility Revenue Bonds.

It is important to emphasize that the toll cuts will have no effect on road or bridge projects because that revenue is held in the Transportation Trust Fund. The revenue in the Transportation Trust Fund comes from the gas tax, bond sales, the titling tax, the sales tax, the corporate income tax, motor vehicle taxes and fees and federal aid. It is used for road projects, local government highway funds, mass transit, the port, the D.C. Transit Authority, and the maintenance of state highways.

The Maryland Transportation Authority holds the revenue that comes from tolls. That revenue is used for construction, maintenance and operation of MDTA facilities, which include the Bay Bridge, Key Bridge, Nice Bridge, Hatem & Tydings Bridges, Fort McHenry Tunnel, Harbor Tunnel, the ICC and the I-95 Express Toll Lane.

The toll decrease will not impact the State’s bond-rating as noted in Moody’s statement which said: “The stable outlook incorporates the expectation of stable traffic and revenue levels, enabling the maintenance of strong financial metrics, and that toll rate reductions, if any, would not have a significant negative impact over credit ratings.”

The Hogan Administration and the Authority emphasize that the toll cuts will have no effect on maintaining the state’s current high maintenance and safety standards.

THE TOLL REDUCTIONS EFFECTIVE JULY 1, 2015 INCLUDE

– Elimination of the E-Z Pass Maryland monthly $1.50 account fee for Maryland residents.

– Reduce all Cash, Video, Commuter and Shoppers’ toll rates at the Bay Bridge, including a reduction in the two-axle cash rate from $6 to $4 round trip and in the commuter rate from $2.10 to $1.40.

– Increase the E-Z Pass Maryland discount from 10% to 37.5% at the Bay Bridge – toll drops from $5.40 to $2.50 round trip.

– Increase the E-Z Pass Maryland discount from 10% to 25% for the Baltimore Harbor (I-895) and Fort McHenry (I-95) tunnels, the Francis Scott Key Bridge (I-695), the Thomas J. Hatem Memorial Bridge (US 40) and the John F. Kennedy Memorial Highway (I-95) – toll drops from $7.20 to $6.00 round trip.

– Reduce two-axle toll rates on the ICC/MD200 and I-95 ETL for all pricing periods by $.03 per mile. This change reduces a two-axle, peak period trip from I-270/I-370 to US I on the ICC from $4.40 to $3.86 (E-Z Pass), and a two-axle, peak period trip on the I-95 ETL from $1.75 to $1.54 (E-Z Pass). Other ICC and I-95 ETL toll rates Also will be reduced based on standard multipliers per axle.

– Establish a 30% discount at the Harem Bridge for three-and four-axle vehicles with E-Z PASS Maryland – three-axle toll drops from $16 to $11.20, while four-axle toll drops from $24 to $16.80.

– Increase E-Z Pass Maryland supplemental rebate program for vehicles with five or more axles by 5 percentage points per trip level.

Please do not hesitate to contact me on this or any issue of concern to you. I depend on your input to represent you to the best of my ability in Annapolis. I encourage and welcome your input.

Best Regards,

Senator J.B. Jennings