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

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.

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: MDOTbonds 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…