Highway User Revenue Restored To Municipalities

The funds are used for local road maintenance.

Annapolis, Md. (KM) – One of the bills passed by the 2022 Maryland General Assembly restores state highway user revenue. That money comes from a portion of the gasoline tax, and is distributed to counties, cities and towns to pay for road maintenance. “For cities like Salisbury and Frederick, and our smaller brethren around the state, we are dependent upon the revenues that are paid through taxes collected at the gas pump. And we’re dependent upon the maintenance of our transportation infrastructure,” says Jake Day, Mayor of Salisbury and the President of the Maryland Municipal League.

Highway user revenue was severely cut by the state to help balance its budget during the 2008 and 2009 recession. Mayor Day says without this money for road repair and maintenance, cities and towns had to make some tough decisions. “It comes down to choices. It was either that or other things were deferred or not  funded because we needed money to repair our streets,”: he says.

Many organizations, like MML, were pushing to get this money restored. He says municipalities will receive 2% of that revenue collected from the gas tax. “And  that amount will rise over the next few years to a record high to record high of 3% in FY ’26 {fiscal year 2026}. and will level back to 2.4% in FY ’27 {fiscal year 2027}, ’28 {fiscal year 2028} and ’29 {fiscal year 2029} and beyond,” he says.

This legislation will enable the municipalities, counties and Baltimore City to receive a total of 20% of highway user revenue instead of the current 10%,  says MML.

in 2009, MML says funding was cut by more than 96%,  and Maryland’s municipalities lost $280-million in funding.

Mayor Day says this money should have been restored when the recession passed. “I don’t think anyone  begrudges the state needing do that at the time,”: he says. “But the time to correct it was previous to now, and I’m glad that it’s finally come.”

He  says that citizens will soon start seeing some action when it comes to road repair and maintenance across Maryland. “Over the next five years, we’ll see a total increase of $10-million that will come to cities and town in the form of paving in our streets, repairing and patching of potholes over the ten years that we would not have received had there not been action on highway user revenues in this legislative session,” he says.

The Maryland Municipal League represents 157 cities and towns and  two special  tax districts across the state.

By Kevin McManus