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Siphoned off road funds leave Maryland county in hole of a mess

Wicomico County will get increased funds for road work this year, but it won't be enough.

By JENNIFER SHUTT
The Trucker News Services

2/19/2013

SALISBURY, Md. — In the past five years, the list of roads projects in Wicomico County has mounted into a dizzying document.

After several years of the county's highway user fees being siphoned off for transportation projects throughout the state, the county is set to see a small increase this year.

Proposed to nearly double from $343,000 during fiscal year 2012 to $615,000, Wicomico officials say that still won't help to fill in all the potholes, reinstate street sweeping in the county or make a dent in the backlog of highway projects that have zero funding.

“It's unlikely that counties will see any meaningful return on highway user revenue,” said County Administrator Wayne Strausburg, adding he expects the return of highway funds to stay at about 10 percent of pre-2008 levels.

Originally a simple transaction between state and county coffers to even out the gas tax, the reduction of highway user fees in recent years has become a rallying point for county governments throughout Maryland.

Bud Church, president of the Worcester County Commissioners, said while an increase is an increase, the diversion of highway user funds away from county government has caused many headaches during the budgeting process and been a disservice to residents who don't just use Route 50.

“Just this week, I was coming up one of the county roads that was paved just a few years ago and there were potholes the size of frying pans,” Church said.

Because the money for highway user fees comes from the 23.5-cent tax on gasoline, counties originally got their share back, but because of the recession and policy decisions in Annapolis, that has changed within the past five years.

The largest drop in return came in fiscal 2010 when Wicomico County went from receiving $6.2 million to $600,000. Worcester County moved from $4.4 million to $428,000, and Somerset County went from $2.4 million to $242,000.

All three Lower Shore counties have been told to expect that number to increase a bit, in some cases doubling from fiscal 2012, but Wicomico County officials don't expect it to ever return to its former multimillion-dollar return.

To help counties recoup some of the money lost, Senate President Thomas V. Mike Miller has introduced the Transportation Financing Act, which would give counties the ability to implement a 5 cent gas tax of their own over three years.

If at the end of 2017 counties have not taken that step, Strausburg said, the state could implement the tax for the counties and keep the money.

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“The calculus is, if the state is going to impose it in 2017 and take the money, then you might as well do it before 2017 and keep the money,” Strausburg said. “The problem is when you look at our economic recovery in terms of rate of recovery, by 2017 I don't think we'll see the kind of trajectory that would make us comfortable with imposing an additional tax on our citizens.”

Because county governments on the Lower Shore, on average, are not eager to increase taxes on their residents, Strausburg said, the best way, at least for Wicomico County, is to focus on economic development.

He said increasing the tax base by enticing new businesses and encouraging businesses already here to expand and hire is the best way to do so.

In order to do that, county leaders have begun working with state officials to decouple the property tax rate from the personal property tax rate. If successful, the personal property tax on businesses would not increase 2 ½ times every time the property tax is increased.

The process of removing the inventory tax on businesses in Wicomico County has also gotten under way.

But, Strausburg cautions, economic recovery won't happen quickly.

“Simply put, we can't tax our way out of this. We have to grow our base — that takes time,” he said.

Jennifer Shutt writes for The Daily Times.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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