Montgomery County’s Transit Task Force on Wednesday released formal recommendations for an Independent Transit Authority (ITA) and how that entity could raise money for a bus rapid transit system.
The 75-page report contains analysis of potential new taxes that would help pay for the first four corridors of the system and offers changes to County Executive Ike Leggett’s controversial proposal to create the ITA.
The task force, made up of civic leaders, transit supporters and elected and county government officials, also attempts to justify the need for the project in the face of significant community opposition that’s been brewing all year.
With a public hearing on the report set for Sept. 30 and an Oct. 6 deadline for comments, here are three things you should know about the recommendations:
Instead of choosing one funding mechanism, the task force laid out broad funding ‘scenarios’
The first four Rapid Transit System (RTS) corridors being studied by the state and county—MD 355 North, MD 355 South, U.S. 29 and Veirs Mill Road—are estimated to cost $1.6 billion to build and $51.6 million a year to operate.
The task force detailed four possible ways to raise that money, most involving a combination of new taxes.
One would use a countywide real property tax increase, with four “scenarios” shown below:
Via Montgomery County Transit Task Force
The first of those scenarios would gradually raise the property tax until it reaches 8.65 cents per every $100 of assessed value in the 11th year. The average tax rate for the 30-year period of the increase (between 2017 and 2046) would be 5.73 cents—which amounts to roughly $252 annually for the owner of a home of average value.
According to U.S. Census reports, the median value of owner-occupied housing units in the county from 2009-2013 was $446,300.
“Use of the county-wide real property tax only would spread the burden of this major infrastructure program over the entire taxpayer base; however, in real terms the burden would fall 75 percent on homeowners and 25 percent on owners of commercial property, since that is the approximate allocation of real property assessed valuation in the County,” the report says.
Another scenario proposes combining a smaller property tax increase that would pay for construction costs with an excise tax on commercial tenants and commercial property owners that would pay for operating costs.
A third scenario would combine a property tax increase, the excise tax on commercial properties and a new 0.5 percent sales tax—which would require its own enabling legislation from the state legislature.
The fourth scenario would combine a countywide property tax increase with a real property tax specific to areas the RTS corridors will service, though the task force admitted “the effective tax burdens on both residential and commercial taxpayers within the corridor-based districts was simply too great.”
The task force supports the idea of an ITA, but with some structural changes
The task force agreed with Leggett’s contention that an ITA—an agency separate from county government that could raise property taxes above the charter limit—is necessary to fund the system because such an agency would allow greater flexibility when it comes to raising money and taking on debt.
But the group recommended some changes from Leggett’s original proposal and made some clarifications concerning how the County Council and county government would oversee that agency.
First, it proposed that the ITA board should be made up of seven members, not five, and those members should serve staggered four-year terms after being nominated by the county executive and confirmed by the council.
Second, the council should require the ITA to submit a multi-year capital improvements program for approval.
Third, the transit authority shouldn’t be able to take property through the process of eminent domain until the acquisition was approved by the council through its budget approval process.
The council should also require annual independent financial audits to be made public to ensure the ITA “has adequate internal controls.” Members of the ITA board should be subject to county ethics laws and the agency must participate in the county’s Open Government Initiative.
The report attempts to take on criticisms of the proposal by justifying bus rapid transit
It’s no surprise the task force supports the idea of bus rapid transit and a RTS system in Montgomery County. The group includes many of the same members who made that recommendation in 2012.
But the report released Wednesday uses a lot of ink responding to criticism of bus rapid transit as too costly and duplicative of existing transit.
It cites statistics that say 35 percent of black residents and 34 percent of Hispanic residents in the county earn less than $50,000 and projections that more than half of the forecasted jobs in major industries will offer less than today’s median county wage of $98,326.
“These trends highlight why the County needs to make a major commitment to rapid transit, not simply to attract employers and workers who have choices about where to lease an office building or buy a home, but to meet the needs of residents whose economic circumstances limit their options in selecting a place to live and work,” the report says.
“These ‘captive’ riders may find that owning and operating a car to commute to work either is cost prohibitive or takes a significant bite out of their household budget,” the report continues. “At the same time, the limitations of our current transit system may reduce their economic as well as physical mobility, as some jobs are literally out of reach from the places where they can afford to live.”
