SB 881 creates three new regional transportation authorities in Maryland: one for the Baltimore Region, one for the Capital Region, and one for Southern Maryland. Each authority is established as a State instrumentality with a governing board made up of local elected officials, legislators, and transportation experts. The bill directs each authority to prepare a regional transportation plan, identify and prioritize transportation projects of regional significance, and coordinate with the Maryland Department of Transportation, metropolitan planning organizations, and other stakeholders.
To fund these authorities, the bill imposes new regional transportation authority surcharges on retail sales and uses, hotel stays, and certain nonresidential property transfers. It sets the sales/use surcharge at 0.5%, the hotel surcharge at 1%, and the transfer tax surcharge at 0.15% for qualifying nonresidential property transfers. Revenue is split between each regional transportation fund and the counties or municipalities in the region, with the local share required to be used only for transportation purposes. The bill also authorizes each authority to issue bonds and other obligations backed by the dedicated revenues, and it creates special, nonlapsing transportation funds for each region with interest earnings credited to those funds.
The bill would amend Maryland tax and finance law by carving the new regional transportation funds out of the general rule that interest on State money goes to the General Fund, and by adding new statutory definitions and revenue-distribution rules in the Tax-General and Tax-Property articles. It also adds a new Title 10.5 to the Transportation Article to establish the authorities, define their powers, and set reporting requirements beginning January 1, 2026. The changes would apply to qualifying recorded or filed instruments on or after October 1, 2025, and the act would take effect the same day.
The overall sentiment reflected in the bill text is pro-investment and pro-regional planning, with the bill framed as a mechanism to finance major transportation improvements and improve mobility, safety, efficiency, and related social and environmental outcomes. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of support or opposition from hearings or floor action. Based on the structure of the bill, likely support would come from regional transportation advocates and local governments seeking dedicated funding, while likely concerns would center on the new tax surcharges, the creation of additional regional authorities, and the distribution of revenue between regional funds and local jurisdictions.
The main points of contention likely involve whether the new surcharges are the right way to fund transportation, how much authority should be given to the new regional boards, and whether the revenue split and project-selection process fairly balance regional and local interests. Businesses, property owners, hotel operators, and consumers could be affected by the new taxes, while counties and municipalities in the three regions would gain dedicated transportation revenue but would be restricted to transportation uses only.
SB 881 would significantly expand Maryland law by creating a new statutory framework for regional transportation governance and financing in three parts of the state. It adds a new title to the Transportation Article establishing the Baltimore Region, Capital Region, and Southern Maryland Region transportation authorities, along with dedicated special funds and bond-issuing authority. It also amends the Tax-General and Tax-Property articles to impose and distribute new regional sales/use, hotel, and transfer tax surcharges, and it exempts the new transportation funds from the general rule that interest on State money goes to the General Fund. Counties and municipalities receiving distributions would be limited to using those revenues for transportation purposes only.
The bill’s tone is strongly supportive of regional transportation investment and long-term infrastructure planning. It presents the new authorities as essential governmental entities designed to improve mobility, safety, and regional coordination, and it creates dedicated revenue streams to support those goals. Because no committee testimony or vote record is provided, there is no documented public debate in the materials, but the bill itself suggests an intent to build a durable funding mechanism for transportation projects in the three regions.
The likely points of contention are the new tax surcharges, the creation of three separate regional authorities, and the allocation of revenues between regional funds and local governments. Critics could object to adding a 0.5% sales/use surcharge, a 1% hotel surcharge, and a 0.15% transfer tax surcharge, especially on businesses, travelers, and commercial property transactions. There may also be disagreement over governance, since the authorities would include state and local appointees and would control project prioritization and funding decisions. Supporters would likely emphasize dedicated funding and regional coordination, while opponents may question tax burden, administrative complexity, and whether the revenue split adequately benefits local jurisdictions.