DLS: Maryland FY26 capital budget $3.07 billion, bond-premium use and veterans home pause draw attention

The governor's proposed fiscal 2026 capital budget totals $3,067,000,000, about $292 million less than the enacted fiscal 2025 capital budget, Department of Legislative Services analyst Matthew Klein told the Capital Budget Subcommittee.

Klein said the decline reflects several timing and source changes: the winding down of federal broadband funding (about $172 million in FY25), fluctuations in Built to Learn (lottery-backed) bond issuances, and reduced federal backing for the proposed state veterans home, which the state has placed "essentially on hold." He added that the administration proposes using roughly $145 million in bond premium proceeds from recent and planned bond sales to support FY26 capital spending rather than to offset debt service.

Why it matters: The budget mix affects debt service, capital project timing and the state's near-term operating transfers. As Klein noted, the state is within the statutory debt-affordability threshold even after recent increases in general obligation authorizations, but debt service is projected to rise in later years because of higher authorization levels programmed in the five-year capital improvement plan.

Klei…