Lawmakers review MDOT six‑year plan, new revenue proposals and debt capacity; transit advocates urge more repair funding

The Transportation and the Environment Subcommittee reviewed the Maryland Department of Transportation's fiscal 2026 allowance and six‑year capital program on Feb. 19, receiving presentations from the Department of Legislative Services, MDOT leadership and public stakeholders about revenue proposals, debt capacity and urgent transit maintenance needs.

DLS analysts summarized MDOT’s combined operating and capital program at about $6.7 billion in the budget package and reported a fiscal 2024 closing Transportation Trust Fund balance of about $631 million. Analysts noted motor fuel, titling and registration revenue through November 2024 trailed projections by about $50.3 million and cautioned that, if the pattern continued, collections could fall roughly $133.8 million short of projections for the year.

DLS outlined the six‑year capital program showing roughly $21.2 billion programmed over the forecast period, with the largest single capital category being system preservation (about 44% of capital spending). Exhibit analyses showed state sources (special and general funds) comprise roughly 44% of the six‑year capital funding mix, with federal support and bonds making up most of the remainder.

The governor’s budget proposes $420 million annually in new state transportation revenues (a BRFAA proposal), which DLS said would translate into an estimated $695 million in annual capital capacity when combined with federal financing and other resources. DLS recommended against a BRFAA change to eliminate required operating‑expense growth assumptions in the TTF forecast, but otherwise deferred on three other BRFAA provisions covering bond limits, GARVEE uses and delayed zero‑emission bus purchases.

DLS and MDOT also addressed GARVEE (grant anticipation) bonds, which are repaid with future federal aid. DLS said Maryland could use up to $1 billion of GARVEE capacity under current authority and noted the CTP anticipates using GARVEE issuances for certain light‑rail modernization projects beginning in 2027, with an expected initial tranche producing about $27 million per year in debt service.

MDOT Secretary Paul Wiedefeld emphasized the Governor's proposed revenues would unlock additional federal funds and financing opportunities and described project highlights in the proposed CTP, including system preservation projects, several highway safety projects, Baltimore light‑rail modernization and port and airport investments. He described the budget as a ‘‘balanced plan’’ that would restore several reductions from an earlier draft plan.

Steve McCullough (DLS) presented the department’s debt profile and coverage metrics, which remain above the department's self‑imposed coverage target of 2.5 times net‑income debt service coverage throughout the forecast under the assumptions in the package. DLS noted that, if the proposed recurring revenue were not provided, the planned capital program would shrink and that borrowing capacity could not fully replace the lost revenue without approaching the bond‑resolution minimum coverage threshold of 2.0 times.

Several transit stakeholders urged the committee to support the governor’s package and stressed urgent state‑of‑good‑repair needs. John Laria of the Baltimore Regional Transit Commission said light rail is “fragile” and cited traction‑power substation needs at the BWI spur and North Avenue yard; James Rouse and Robin Budish’s Transit Choices and the Central Maryland Transportation Alliance emphasized that deferred capital needs risk system reliability and rider confidence. Testimony from the Sierra Club and construction industry representatives stressed the economic, environmental and jobs effects of additional transportation investment.

Secretary Wiedefeld also addressed the Francis Scott Key Bridge update, noting that the bridge is owned by the Maryland Transportation Authority, that design‑build preconstruction began last fall and that MDTA is pursuing accelerated reconstruction to reopen traffic as quickly as possible.

Committee members questioned forecasting methods for motor‑fuel and titling revenue, the distributional effects of proposed new fees, and whether the new IT and capital programs would change MDOT staffing needs. MDOT said forecasting uses quarterly updates and outside consultants, and the department pledged to provide additional materials comparing what was cut, restored or delayed across the CTP updates.

No formal votes occurred at the hearing; DLS recommended adoption of annual budget language requiring notification to budget committees of proposed changes to the transportation capital program.