After sometimes tense negotiations, the Maryland House of Delegates and Maryland Senate fiscal leaders have announced a deal on the fiscal 2025 spending plan. While the full details of the budget compromise will become apparent in the days ahead (where a final vote in each chamber awaits), MACo successfully advocated for the General Assembly to reject deep funding cuts for local roads and bridges.
"The Maryland House and Senate have agreed to a deal in principle that would restore funding for immediate transportation needs and continue to invest in establishing a world-class education system," Senate President Bill Ferguson and House Speaker Adrienne A. Jones said in a joint statement. "We remain committed to developing a comprehensive approach to transportation in the future this interim. The agreement also keeps Maryland competitive and primed for economic growth in the year ahead."
The leaders from the two chambers formally convened as a "conference committee" to resolve their differences formalized the new compromise plan during its final meeting on April 4. The far-reaching agreement included new revenues targeting education, transportation, and trauma services.
Highway User Revenues - Local Roads and Bridges Had Been On the Chopping Block
Among the elements of the budget compromise is an agreement to reject the proposal, part of SB 362, the Budget Reconciliation and Financing Act, to make stark cuts in the FY 2026 and FY 2027 funding for locally-managed roads and bridged, through the Highway User Revenue formula. This decision avoids a reduction of over a quarter billion dollars across those two coming years, and sets the stage for a more considered plan for global transportation funding in the years ahead.
Unlike most states, local governments in Maryland maintain the lion's share of the state's roads and bridges. However, county governments have no authority to levy their own transportation revenues – counties depend entirely on a share of state-levied revenues to support safety and maintenance work on local roads and bridges across the state.
For decades, the State supported a balanced approach to maintaining its transportation infrastructure. The bulk of transportation revenues—mainly motor fuel and vehicle titling taxes—have been split between the State (for its consolidated Transportation Trust Fund, serving multiple modes) and local governments (who own and maintain roughly five of every six road miles across the state). For many years, the share sent to local governments was 30% of that total.
The State faced a mid-year budget crisis during the depths of the "Great Recession" in 2009. In turn, the Board of Public Works adopted a 90% reduction of the local distributions of these Highway User Revenues and a roughly 40% reduction to Baltimore City's allocation (the largest by far to any jurisdiction). Since then, many service areas have fully or primarily restored recession-driven cutbacks. This is not the case with Highway User Revenues – they remain far behind historic levels, even after the State has enacted a substantial transportation revenue increase.
The $396 million in the proposed budget plan for fiscal 2025 remains far short of Maryland's proper and historic funding levels, even on a simple dollar-to-dollar basis. Accounting for road maintenance and materials costs would expand this gap even further.
HB 1187 / SB 726 of 2022 increased local jurisdictions' highway user revenues by an estimated $51.9 million in fiscal 2024, $190.3 million in fiscal 2025, $241.5 million in fiscal 2026, and $245.6 million in fiscal 2027.
However, the governor's Budget Reconciliation and Financing Act (BRFA) proposed to slash funding for local roads and bridges across the state by eliminating planned increases in fiscal 2026 and fiscal 2027.
MACo and county leaders urged state policymakers to resist these deep cuts and advance a sustainable solution to address critical infrastructure needs across the state. In advancing such a plan, MACo argued that proper restoration of the Highway User Revenues formula should itself be a priority to create sensible and reliable support for all locally maintained roadways.
During the final meeting of the Budget/BRFA conference committees, on April 4, the group agreed to reject these reductions. That change will be reflected in the final version of SB 362 that will be presented to the full floor of each chamber for its final vote. In agreeing to the result, leaders from both chambers emphasized their commitment to local roads and bridges, and its effect on communities across the State.
For earlier Conduit Street coverage (following the House's decision to reject the cuts during its own fiscal deliberations), see: House Breaks with Senate, Wants to Defend Transportation and Highway User Revenues
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