Rhetoric Over Fund Transfers Challenged - Southern Maryland Headline News

Rhetoric Over Fund Transfers Challenged


ANNAPOLIS (February 11, 2011) — Gov. Martin O'Malley's plan to transfer $100 million from a fund dedicated for building roads and bridges is drawing strong backlash, but some lawmakers say the rhetoric is unfounded.

In recent weeks, Republican leaders have taken turns blasting O'Malley for "raiding" the Transportation Trust Fund to help balance the state's budget. It's a term that's even crossed party lines, as Senate Majority Leader Rob Garagiola has occasionally used it to describe transfers from the transportation fund.

But the image of O'Malley pillaging the fund's coffers is far from accurate, say some lawmakers, who argue the money that's been redirected to help run the state's day-to-day operations in the past 27 years has largely been replenished.

Since 1984, roughly 91 percent of the more than $571 million redirected from the transportation fund to the general fund has been paid back, according to data from the Department of Legislative Services.

A $68 million repayment to the transportation fund scheduled for fiscal 2012 would make up the outstanding balance, lawmakers said.

"They're not talking the facts. They simply don't know how many times we've paid back the Transportation Trust Fund," said Delegate Tawanna Gaines, a Democrat from Prince George's. "Sometimes you want to put that spin on it. You simply want to give misinformation."

The transportation fund, established in 1971, is used mainly for bridge upkeep and highway maintenance. It's funded primarily by the gasoline tax, vehicle registration fees and vehicle excise taxes.

Past governors have tapped the fund to close budget shortfalls and on occasion to pay for items like new helicopters. In 2003 and 2004, under former Republican Gov. Bob Ehrlich, a total of $315 million was transferred from the transportation fund to the general fund to help close budget deficits, according to legislative analysts.

This session, O'Malley's fiscal 2012 budget proposes shuffling $60 million from the transportation fund into the general fund. Another $40 million would be redirected from the transportation fund to the rainy day fund.

O'Malley's proposed transfers are expected to be a hot topic at Monday's meeting of the Blue Ribbon Commission on Maryland Transportation Funding, said Gaines, a member of the commission. The proposal, lawmakers said, is unpopular among factions in the House, the chamber that gets the first shot at the budget this session.

O'Malley also is proposing transferring millions more from other dedicated funds to bridge an estimated $1.4 billion budget shortfall.

The shuffling of transportation monies has drawn the most attention, though transfers from other funds, like one dedicated to Chesapeake Bay restoration, haven't gone unnoticed. Republican leaders say O'Malley's plan amounts to "raiding" dedicated funds to help fuel spending.

"How can we, in good conscience, expect taxpayers to entrust their money to these purposes when the funds are continually raided for new spending?" House Minority Whip Jeannie Haddaway-Riccio asked during the GOP's response to O'Malley's State of the State address last week.

Democrats defend the transfers, saying the funds are pots of money the state can tap if needed. The monies are equivalent to a "short-term loan" and the transportation fund is the biggest pot the state has to tap, said Delegate John Bohanan, D-St. Mary's.

"Is it true that for a long time we've been balancing budgets through transfers, yes. But much of that money has been repaid," Bohanan said of the transportation fund, while noting that smaller dedicated funds are not always replenished.

Garagiola, D-Montgomery, has introduced legislation aimed at pumping an estimated $450 million annually into the transportation fund by increasing the gas tax and vehicle registration fees. His bill also includes a constitutional amendment to prohibit the state from tapping the transportation fund to balance the budget.

As for using the term "raid" to describe the governor's plan, Garagiola said: "I've not made that like my mantra."

Delegate Herb McMillan, R-Annapolis, thinks the label fits because the state hasn't paid back every transfer. McMillan filed legislation Friday that would allow voters to block the governor from using money from any of the state's dedicated funds for balancing the budget.

He's dubbed the bill the "Dedicated State Funds Protection Act."

"I don't' think you should con taxpayers with legislation that establishes a tax or fee and play a game of bait and switch," said McMillan, who co-sponsored legalization in 2004 to create a constitutional amendment to block the state from tapping the transportation fund."They've been doing business like this for so long they think it's appropriate."

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