BALTIMORE — The Maryland Transportation Authority is expecting to lose millions in toll revenue while we wait for a new Key Bridge.
"Cumulatively, from the date of collapse to the assumed reopening in the fall of 2028, the revenue loss associated with the closure of the bridge is estimated to be $143.9 million,” the MDTA tells WMAR-2 News.
“It's a combination; it's hazmats, it's passenger vehicles that are going south on 95 that are choosing to go around the beltway instead of through the tunnel, or the reverse, coming north,” Deborah Sharpless, chief financial officer for the MDTA, said during a board meeting Friday, where the agency’s financial staff provided updates on the Key Bridge.
To offset the lost revenue, the MDTA told the board a statewide toll increase will likely be necessary by 2028, a year sooner than originally planned. Tolls were last increased in 2014, followed by a reduction in 2016, the MDTA says.
Meanwhile, the agency is still spending on the clean-up. On Friday, the board approved the agency’s request for a budget increase for fiscal year 2024, which ended on June 30. The MDTA asked for an additional $25 million for salvage and debris removal, plus a discretionary $15 million if the budget is exceeded. That’s all in addition to the $60 million the state already received from the federal government for clean-up costs, shortly after the collapse.
"And we anticipate insurance proceeds will cover these costs,” Jeffrey Brown, MDTA's director of budget, said.
The MDTA is also counting on the insurance money from Chubb, the company that insured the Key Bridge, to cover part of the reconstruction cost. Chubb has already agreed to pay $350 million, and the MDTA is expecting that money soon, CFO Sharpless reported Friday.
Below is the breakdown of how the insurance money will be spent:
"The Authority anticipates it will resume receiving federal funds after the insurance proceeds are exhausted. Beginning in fiscal year 2026, it is assumed that the MDTA will be reimbursed by the federal government for eligible project costs at a 90% federal, 10% MDTA split,” Chantelle Greene, director of finance for MDTA, said.
But Maryland leaders and the Biden administration are pushing for the federal government to cover 100% of the cost.
On Friday, the White House sent a letterto House Speaker Mike Johnson (R-LA), reiterating that desire, and requesting $4 billion in disaster relief funding, which would include the roughly $1.7 billion needed to rebuild the bridge.
The Biden administration broke down the request into two sections: 1) A $3.1 billion request for the Department of Transportation’s Emergency Relief Program, which would provide funding for the " repairing and rebuilding highways and roads that have been damaged in disasters and other emergencies across the Nation, including the cost of rebuilding the Francis Scott Key Bridge in Baltimore,” the letter states. And 2) $700 million for the Community Development Block Grant Disaster Recovery, which would provide disaster relief in connection with the wildfires in Maui, and tornadoes in the Midwest.
Governor Moore has remained confident that a deal with Congress will get done, but the MDTA is planning for the chance it doesn’t.
"Our current assumption is that federal funds are at 90%. There's lots of work being done for 100% federal funds but as of this second, it's still 90%,” Sharpless said.
The full statement to WMAR-2 News from the MDTA is below:
"Through FY 2027, the MDTA remains in compliance with its financial goals and legal standards. Based on the current forecast estimates, beginning in FY 2028, a systemwide toll increase will be necessary to maintain 2.0 times debt service coverage throughout the remainder of the FY 2025-2030 forecast period. Tolls were last increased in FY 2014 followed by a reduction of tolls in FY 2016.
Despite the loss of the Key Bridge, the MDTA has sufficient cashflow and capital reserves through FY 2025 to support additional expenses associated with the Key Bridge Rebuild. Federal funding has provided additional support. It is estimated that the MDTA will recapture 40 percent of the passenger and commercial vehicle traffic from the Key Bridge at the two other Harbor Crossings (Fort McHenry & Baltimore Harbor tunnels). The MDTA’s lost revenues during the closure of the Key Bridge are estimated to range from a low of $9.5 million in FY 2024 to a high of $34.9 million in FY 2028. Cumulatively, from the date of collapse to the assumed reopening in the fall of 2028, the revenue loss associated with the closure of the bridge is estimated to be $143.9 million."
