The Maryland Transportation Authority

by Virgil Soule. 0 Comments

  From a capitalist point of view the Maryland Transportation Authority – MDTA for short – is something of a mystery. Apart from its apparent purpose of running the State’s toll facilities, it would seem to have no other reason for existing. 

MDTA began in 1971 as an independent agency created to run the State’s toll highway facilities. Today, it is responsible for managing, operating and improving all of the State's toll facilities including the new Inter-County Connector in Montgomery County. It is an autonomous pseudo-corporation owned by the State of Maryland that receives no support from the State and pays no Federal or State taxes on profits (excuse me, increases in “net assets”) gained from its operations. Unlike the State Lottery Commission, which is embarrassingly profitable, MDTA returns no money to the State Treasury.

Judging from salary costs listed in its 2010 financial report, MDTA employs about 2,000 people (1,000 if the average salary is $100K per year). This is hardly enough to make it a major employer among companies operating in Maryland.

In the capitalist realm, companies exist to sell products and, quite frankly, make somebody rich. If a company is successful, profits are rolled back into new product development, stockholder dividends, and perhaps even employee bonuses. Otherwise, it becomes money in the bank – cash on hand. Growth and making money are the prime motivations for operating a capitalist company of any kind.

MDTA doesn’t fit the capitalist model at all. It offers a product that nobody really wants, except perhaps rich commuters willing to pay a disguised tax to bypass highway congestion (caused by the State’s highway designs, actually). Its growth has been inordinately slow and it certainly isn’t making anybody rich (at least not obviously). MDTA refers to itself as “an enterprise fund of the State of Maryland” but not in the same sense as private enterprise.

Maryland is not alone in operating profit-making state-owned transportation companies. The states of New York and New Jersey sponsor the Port Authority of New York and New Jersey and Orange County, CA, operates the 91 Express Lanes Corporation.

The Port Authority of New York and New Jersey is a financially self-supporting public agency that relies almost entirely on revenues generated by facility users, tolls, fees and rents. It receives no tax revenue from NY, NJ or NYC and apparently returns none to any of those entities.

The 91 Express Lanes facility is a four-lane, 10-mile toll road built in the median of the Riverside Freeway (SR-91) between the Orange/Riverside County line and the Costa Mesa Freeway (SR-55). Its primary selling point is ten miles of congestion-free driving during high-demand commuting hours. It achieves this by means of peak-hour pricing toll structures. During peak congestion periods on the parallel Riverside Freeway, users pay premium tolls designed to exclude, shall we say, lower-class users. Obviously, 91 Express Lanes depends for its existence on continued congestion in the Riverside Freeway, which is largely hemmed in by urban development along its length and not easily expanded.

The same peak-hour toll structure scheme is used by the Inter-County Connector. The ICC is more similar to the Dulles Greenway, however. The Greenway is currently privately-owned but could become state-owned depending on its continued profitability, which is dependent of course on state and federal taxation.

Two of the alternatives for a future I-270 upgrade would look exactly like the 91 Express Lanes facility. Express Toll Lanes would be laid down in the median between the free federal lanes. Users would pay a fee to use these lanes to avoid congestion that would be unimproved in the free lanes and would be guaranteed to get worse over time. Most likely the ET lanes would be operated by the MDTA and would be designated as a state highway to avoid conflict with federal law prohibiting toll charges on the Interstate Highway System.

Involving the MDTA in the highway upgrade process would allow funding for ETL construction to be more easily hidden from public or legislative scrutiny. Federal money would of course be used but it wouldn’t be specifically designated for I-270 improvements. An ET lane facility would provide a few new jobs but otherwise wouldn’t be a benefit to Maryland taxpayers.

The simplest and cheapest alternative for an I-270 upgrade would be to add another lane either way in Frederick County. This is one of the alternates presented except that the new lanes would be HOV-only during high-demand hours. From an engineering point of view, HOV lanes are counterproductive. They take away valuable lane space when it’s most needed. Their justification is political, not technical.

Soviet Premier Nikita Khrushchev once boasted, “Your grandchildren will live under socialism.” It’s now been fifty years. My grandchildren are coming of age and we are closer now to socialism than ever before. The Federal Government is the nation’s largest employer and the country is being bankrupted by the cost of maintaining it. The State of Maryland is likewise running a deficit. Little “enterprise funds” like MDTA are the prototypes and predecessors for a socialist future in Maryland and these United States.

A socialist future cannot be maintained in a democracy. The inevitable result must a political system in which one party rules and all others are excluded. Is this the future we want? Or do we even care?

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