DALLAS -- Newly inaugurated Maryland Gov. Larry Hogan included $419 million of funding for the state's two light rail projects in his fiscal 2016 budget of $16.4 billion, which was presented to the General Assembly on Friday.
Hogan's proposed budget for the Maryland Transit Administration in fiscal 2016 includes $312.8 million for the $2.4 billion Purple Line in the northern suburbs of Washington, D.C., and $106.2 million for the $2.6 billion Red Line in Baltimore. The budget, if passed by state lawmakers, would go into effect July 1 when the state's new fiscal year begins. Lawmakers can reallocate the funding designated in Hogan's proposed budget but cannot increase total spending.
The scheduled Jan. 9 opening of proposals from four potential private partners in the Purple Line was pushed back until March following the election to give Hogan, who was sworn into office Jan. 21, time to review the project's funding.
Hogan, a Republican businessman who beat then-Lt. Gov. Anthony Brown in a November upset, said during last year's campaign that he favors highway projects over public transit. Before the election Hogan questioned whether the two rail projects were worth the combined $5 billion cost but later said both projects were "worth considering."
Secretary of Budget and Management David Brinkley said the 2016 budget is not the final word from the governor on the two rail projects.
"Both projects are pending review and re-evaluation," he said.
Stewart Schwartz, executive director of the transit-supporting Coalition for Smarter Growth, said the governor's decision was proper because the state has already spent $170 million on planning and engineering for the project.
"Walking away would waste taxpayer money, discourage future public-private partnerships, and forego a significant economic development opportunity," he said.
The Obama administration has promised $900 million for each of the projects through the Federal Transit Administration's New Starts grant program. The fiscal 2015 budget provides $100 million to each project.
With state funding assured for at least the near term, construction work on the rail projects could begin this year.
The 16-mile Purple Line could be operational by 2020 if construction gets under way in late 2015.
The line with 21 stations would stretch from Bethesda in Montgomery County to Carrollton in Prince George's County. It would connect with the Maryland segments of Washington Metropolitan Area Transit Authority's Metro system and Amtrak's passenger rail service.
The private partner in the project would invest up to $900 million in the project and receive a concession to operate and maintain the Purple Line for 35 years. The private partner would receive an annual availability payment of up to $200 million rather than a share of the fare revenues.
Maryland is seeking a $732 million federal Transportation Infrastructure Finance and Innovation loan for the Purple Line in addition to the New Starts grant.
Other funding would include up to $760 million from the state transportation trust fund and $240 million from the two counties.
Baltimore city and county officials have pledged a total of $280 million in cash and contributions to the Red Line project.
A public-private partnership is being considered for funding the 14-mile Red Line but state officials said it would not be as extensive as the P3 to build the Purple Line.
The proposed fiscal 2016 budget would eliminate a potential $750 million revenue shortfall and raise discretionary spending by 0.5% from fiscal 2015, Hogan said. State revenues are expected to grow by 3.5% during the year.
Debt service, pension contributions, and mandated funding consume more than 80% of the state spending, Hogan said in his budget message.
"In the past, the state has addressed budget shortfalls with short-term solutions including increased borrowing," he said. "As a result, our state budget is driven by unsustainable obligations, most of which are mandated by law."
