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Highlights of Credit and Finance

Maryland Gov Larry Hogan Plays Chicken With Purple Line Funding

A cloud of uncertainty has been hanging over the Purple Line since Hogans election in November. On the campaign trail, the Republican threatened to kill the project, which has been in the works for more than a decade and was expected to break ground this year. Hogan has kept some state funding for the project in his budget, but hasnt committed to building it.

In his latest announcement, Hogan said he is extending the deadline for bids to construct the Purple Line five months, from March to August. He had already pushed the deadline back two months, before taking office.

The additional time, Hogan argues, will allow firms to revise their proposals to lower costs and save money. His newly appointed transportation secretary, Pete Rahn, will study and review the proposals.

But is this move really about cost containment? Advocates are concerned that Hogans foot-dragging will have another effect: jeopardizing federal funding.

Nick Brand, president of the Action Committee for Transit in DCs Maryland suburbs, says Hogans new timeline would put the project out to bid in early August instead of March. Then, the state must spend some time reviewing and ranking bids before making a selection. But $100 million in federal funding was appropriated for the fiscal year ending September 30. Even if there are no additional delays, its going to be tough to finalize a funding agreement with the Federal Transit Administration before then, Brand said.

Running past the September date isnt a dealbreaker, but it will increase uncertainty surrounding the project, according to Brand. There’s apparently not a fixed deadline for the money to be spent or committed, he said. But once youre into a new fiscal year, the competition is out there saying, Maryland’s not ready but we’re ready.

If it goes into January and February and there’s not an agreement with the FTA and the state and the [private] investors, then the first $100 million in federal funds becomes increasingly eyed by the circling sharks, the other projects that are out there.

If the governor elects not to continue the project there will likely be a fight in the legislature, where representatives from Marylands DC suburbs, which generally support the project, hold a fair number of seats.

Pushing in the other direction are residents of the wealthy suburb of Chevy Chase, who have been lobbying Hogan hard to stop the transit project. The town has spent close to $1 million opposing the Purple Line, according to the Action Committee for Transit. Members of the Columbia Country Club held a fundraiser for Hogan last month in Chevy Chase.

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