State Property Tax - Transportation Funding (Transportation Funding Act of 2025)
Summary
HB641 would create a new annual process for funding transportation projects and programs through a State property tax. Each year, the Governor, after consulting with the Secretary of Transportation, would have to submit a proposal with the annual budget bill to the Board of Public Works and the General Assembly. That proposal would recommend a State property tax for the next taxable year, include revenue estimates by county, explain the criteria used to set the rates, and could establish different tax classes, subclasses, rates, and even geographic boundaries for different tax treatment.
The bill also gives the Board of Public Works authority to approve, reject, or modify the proposed tax by February 15 each year. If approved, the tax would be levied and collected like other State and county property taxes, and the revenue would be deposited into the Transportation Trust Fund. The bill limits the proposal so that the revenue cannot exceed the amount attributable to the existing State tax rate certified under current law, and no single county could be responsible for more than 25% of the additional revenue generated by the new transportation property tax.
Impact
HB641 would amend Maryland’s State finance and property tax laws by adding a new section to the State Finance and Procurement Article and revising the Property Tax Article to authorize an additional State property tax dedicated to transportation. It would expand the State’s taxing authority by allowing differentiated rates by property class, subclass, and geographic area, while also directing the Comptroller to send the proceeds to the Transportation Trust Fund. The bill would affect property owners statewide, with potential rate differences by county or transportation-related area, and would create a recurring annual decision process involving the Governor and the Board of Public Works.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the available context suggests the bill is presented as a transportation funding measure rather than a controversial policy overhaul. Its structure indicates an effort to create a predictable, annual revenue source for transportation needs while retaining executive and Board of Public Works oversight. Because there are no transcripts or vote records provided, there is no documented public sentiment in the supplied materials beyond the bill’s formal support for transportation investment.
Contention
The main points of potential contention are the creation of a new State property tax and the possibility of variable rates across counties, property classes, or geographic zones. Property owners could object to higher tax burdens, especially in areas targeted for transportation projects or infrastructure boundaries, and the bill explicitly anticipates concerns about disparate impact and disproportionate burden. Another likely issue is the fairness of using property tax revenue for transportation funding and the extent of discretion given to the Governor and Board of Public Works to set or modify rates each year.