[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6052070,"mediaKeyId","3414137-332f0d21eace2c34921b94d22de79235","parentId",3414137,"title","Appropriations subcommittee briefed on MDOT bond program and state trunk line fund debt","audioSeconds",556,"startMs",1082000,"endMs",1638000,"viewUrl","/Search/View?dp=1&key=3414137-332f0d21eace2c34921b94d22de79235&start=1082&end=1638","thumbnailUrl","https://assets.pipeline.soar.com/3414137-332f0d21eace2c34921b94d22de79235/thumbnail_1082000.jpg","articleUrl","/articles/6052070/Michigan/Appropriations-subcommittee-briefed-on-MDOT-bond-program-and-state-trunk-line-fund-debt","mediaUrl","https://secure.pipeline.soar.com/6052070-6669d0b60c5bef5a4a4679c7ea29356d/orig.mp4?Expires=1771146550&Signature=TNtpKo1TxgBwXfBENmwsWWdfVY-kdsXYU~7ot38kH2qg2dnOPea~1z0cwbtvOpyOotqYBvJNX~PSlfR0OBplwG1tfyWYcRsgg4c1KIew6ZuAVlh7nriX-qav-nYTTPqr~Q-N6T-CSTT41-OzL9g4z9az~m7pPkh1jHmhrtDjOHKYdHsfaSwOeyJz4fJi2fXuDs1Ce~2HdJxdDTppZEjz5UDOUYi0Nl6U4pZgD098oPldEijDCBFPITmT7qJQ9b3MEsawAm64g58k0LLL~~dsiAigiqYqygK32TD1JLzn996kn7ZFqaJUA1u6fGbOGflX1-j9iwiv3HHcYxm-ubA21Q__&Key-Pair-Id=KUT5TJCACFTXG","author","Michigan House of Representatives","date","2025-04-30T00:00:00Z","article","The Appropriations Subcommittee on State and Local Transportation on Thursday heard a briefing on the Michigan Department of Transportation\u0000(MDOT) bond program and debt service from House Fiscal Agency analyst William Hamilton.

Hamilton said MDOT has roughly $3 billion in outstanding transportation-related debt and has sold about $2.8 billion of a $3.5 billion authorization under the Rebuilding Michigan program, with the department anticipating the sale of the remaining $700 million before year-end. \"They sell state trunk line fund bonds by pledging the state trunk line fund,\" Hamilton said, adding that the department also can issue bonds by pledging federal grant revenue.

Why it matters: MDOT\u0000bonds shift some transportation costs to future years and create ongoing debt-service obligations for constitutionally restricted transportation revenues such as fuel taxes and vehicle registration fees. Those obligations affect how much revenue is available for construction and maintenance in future budgets.

Hamilton described the bonds as revenue bonds that are secured by pledges of constitutionally restricted transportation revenue rather than by the state's full faith and credit. \"They are considered revenue bonds,\" he said. He also noted the commission can issue GARVEE-style bonds (bonding in anticipation of federal grant revenue) and that the State Transportation Commission must provide the House and Senate appropriations committees with a list of projects at least 30 days before bonds are issued.

Hamilton walked members through historical and recent borrowing: outstanding state trunk line fund debt rose in the early 2000s to about $2.3 billion, fell to about $1.1 billion by 2019, and increased again after the 2020 Rebuilding Michigan program. He said the commission originally authorized up to $3.5 billion and had sold $2.8 billion so far; he expects the remaining $700 million of that authorization to be marketed this calendar year.

On limits and coverage, Hamilton cited Public Act 51 and commission policy. He summarized the statutory constraint as limiting state trunk line fund debt service to 50% of the previous year's constitutionally restricted revenue credited to the fund, and said the State Transportation Commission uses a stricter 4-to-1 revenue-to-debt-service coverage policy. \"Currently, in the last bond statement, STF revenue was 5.4 times the amount needed to cover STF debt service,\" Hamilton said, noting the department remained below statutory and policy limits.

Committee members pressed for more detail on long-term costs. Representative Morgan asked why bonding is used instead of pay-as-you-go budgeting; Hamilton replied that bonding \"can advance their construction program as opposed to waiting to build up the cash,\" allowing road users to benefit from improved facilities sooner and that historically low interest rates made borrowing more attractive in recent years. When asked for the total cost to retire current bonds over their full schedules, Hamilton said he did not have that figure on hand but offered to obtain the detailed debt-service projections from MDOT.

Hamilton also said bonds are often issued in multiple series with different maturities and that many issues include call provisions that permit refunding under favorable conditions. He noted MDOT policy to refinance callable bonds if refunding would yield at least a 3% net present value savings.

Next steps and context: Hamilton said MDOT and the Office of Financial Management had not yet released final 2024 audited financial statements at the time of his briefing, which affects the most recent official figures. He offered to provide committee members with detailed debt-service schedules and the total cost to retire the outstanding debt on request.","mediaType","Video","parentTitle","Appropriations - State and Local Transportation | Wednesday, April 30, 2025","oneSentenceSummary","The Appropriations Subcommittee on State and Local Transportation on Thursday heard a briefing on the Michigan Department of Transportation (MDOT) bond program and debt service from House Fiscal Agency analyst William Hamilton.","taxTitle","Appropriations - Transportation, Appropriations, House of Representative, Committees\t\t\t\t\t, Legislative, Michigan","taxId",30769,"location","Michigan","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6052065,"Subcommittee hears explanation of interdepartmental grants that reimburse other state agencies for MDOT services",234,550000,784000,"/Search/View?dp=1&key=3414137-332f0d21eace2c34921b94d22de79235&start=550&end=784","https://assets.pipeline.soar.com/3414137-332f0d21eace2c34921b94d22de79235/thumbnail_550000.jpg","/articles/6052065/Michigan/Subcommittee-hears-explanation-of-interdepartmental-grants-that-reimburse-other-state-agencies-for-MDOT-services","https://secure.pipeline.soar.com/6052065-4298d23d32a490e3e72869f57da259fd/orig.mp4?Expires=1771146550&Signature=Ej4SHbYAQwnl62l0MCtIIjbrFO3gplvhxxfqWN3OQRqaEkuZcJNBkOW1mghEzVdTBDiunBPp8SIGtVczFXfdy1Bowi4HF3futoBbPKuGLoxQywbiM9ILLIXPN0SIqa~e39QGDEc3UESsw5JykrnHOf4Nacw4mAh-ZvYqDsxO-Z9F1GDWEZhU2Y2TJ4MoQbU7njaWVA6byvM-4TwnzJDYNpnDsB62iJ8urBI2xEUMiZG-Vui4jXz3viqT5aVar7oJv3wFh-uh8GrbYvhP1g1adu~8FbxvAfx-HUIcCDd5Q64WVNEdxSQbg33sg55hM2JgccCptSM8UCT2mYAP-vFFyA__&Key-Pair-Id=KUT5TJCACFTXG","The Appropriations Subcommittee on State and Local Transportation was briefed on interdepartmental grants (IDGs) in the state transportation budget by House Fiscal Agency analyst William Hamilton.

Hamilton told members the enacted transportation budget lists roughly $50.7 million in IDGs and about 20 separate line items that reimburse other state departments for services provided to MDOT or the transportation funds. \"Interdepartmental grants are simply a budgetary tool that allow for one State Department to effectively reimburse another State Department for services performed,\" Hamilton said.

What the grants cover: Hamilton said the IDGs reimburse agencies such as the Attorney General, the Department of Technology, Management and Budget (DTMB), the Department of Treasury, the Auditor General, Environment, Great Lakes, and Energy (EGLE), the State Services Commission, and the Secretary of State. He highlighted the Michigan Transportation Fund (MTF) appropriation to the Secretary of State: the budget includes a $20 million MTF payment that partially reimburses branch operations for vehicle registration and title work; Hamilton said the total cost of those branch operations related to registration collection is closer to $90 million.

Hamilton explained why the appropriation appears in two places: the $20 million is shown in both the transportation budget as an IDG and in the Secretary of State\u0000general government branch-operations appropriation. When analysts report the total state budget, they use \"adjusted gross appropriations\" to avoid counting those dollars twice.

Audit and oversight: Hamilton said these IDGs are typically governed by contracts or agreements that set a not-to-exceed cost and that the Auditor General audits the costs periodically; he said the audit of these interdepartmental arrangements is performed every two years. Committee members asked how the actual cost is determined and whether the appropriated amounts match the underlying cost. Hamilton pointed to a cost allocation study for the Secretary of State branch operations that showed the actual registration-related costs substantially exceed the $20 million MTF IDG.

Administrative note: At the start of the meeting the committee adopted the minutes of its April 23 meeting by unanimous consent. \"There being no objections, the motion prevails by unanimous consent,\" the clerk recorded.

Next steps: Hamilton offered committee members follow-up material, a deeper written explanation in the packet, and availability for one-on-one tutorials about IDG accounting and the flow of restricted transportation funds.","The Appropriations Subcommittee on State and Local Transportation was briefed on interdepartmental grants (IDGs) in the state transportation budget by House Fiscal Agency analyst William Hamilton.","actionData","errors"]

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Appropriations subcommittee briefed on MDOT bond program and state trunk line fund debt

Subcommittee hears explanation of interdepartmental grants that reimburse other state agencies for MDOT services