WASHINGTON — The Montgomery County Council in Maryland Tuesday unanimously voted against proposed toll rate hikes for the InterCounty Connector, the $2.4 billion toll road currently under construction, and also cut $30 million from the county’s fiscal 2010 budget.
Separately, Maryland announced $360 million of cuts to the state’s fiscal 2010 budget yesterday.
The ICC, an 18.8-mile toll road project scheduled to open in 2013, will connect Interstate 270 in Gaithersburg to Interstate 95 south of Laurel, linking Montgomery and Prince George’s counties.
The council’s vote against the Maryland Transportation Authority’s proposal to raise toll rates to 35 cents per mile was non-binding because the MdTA has sole tolling control over the ICC and the other seven facilities that it oversees, sources said.
But the council’s president, Philip M. Andrews, said the council members plan to send a letter to state officials asking them to oppose the rate hike and instead push for a lower rate. The council also will ask that regular users of the road receive a discount on fares, he said.
State officials sit on the authority’s board.
The proposed rates “are so high” they “will interfere with the road being used to capacity,” Andrews said. The rate increase would mean drivers would pay between $8.80 and $12.30 during rush hours and could add up to $3,000 a year for each commuter, he said.
The toll rates affect the revenue collected by the MdTA that is used to back bonds issued for the ICC. The authority has issued $750 million of grant anticipation revenue vehicle bonds for the project so far and expects to issue a total of $1.8 billion of bonds to finance ICC construction, according to MdTA officials and Moody’s Investors Service.
The authority plans to issue about $500 million of tax-exempt revenue bonds and taxable Build America Bonds for the ICC in early December.
The MdTA applies revenues from the six roads that charge tolls to pay off the ICC’s bonds. Toll revenue from the ICC will be incorporated into debt service payments once the road opens.
The authority has been raising rates since 2003 throughout the system and has demonstrated the ability to raise rates without discouraging drivers from using roads, analysts at Moody’s said in a report issued this week.
Toll revenue from the MdTA’s other roads will be enough to pay debt service on the ICC bonds, Andrews said.
Maria Matesanz, Moody’s lead analyst covering the transportation agency, said she had not heard about the council’s vote, but that the MdTA has final approval on toll rates.
The authority is rated Aa3 by Moody’s and AA-minus by Fitch Ratings.
Also on Tuesday, the council approved about $30 million of cuts to the county’s fiscal 2010 budget. The mid-year cuts will offset an expected $370 million shortfall in fiscal 2011. Montgomery’s state aid was cut by $20 million earlier this year and Andrews said further cuts could be imminent.
Separately yesterday, Gov. Martin O’Malley submitted to the Board of Public Works a proposal to cut $360 million more from the state’s fiscal 2010 budget. The cuts deplete $25 million from the state’s rainy-day fund. O’Malley said in a statement that the drawdown preserves the state 5% of reserves to general fund revenue and will maintain the state’s triple-A rating.
