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Environment department outlines FY26 capital priorities: lead service lines, PFAS, Bay Restoration Fund and flood mitigation
Summary
Maryland Department of the Environment presented a $412 million FY26 capital request focused on drinking and wastewater upgrades, lead service line replacement planning, PFAS response, Bay Restoration Fund investments and flood mitigation, while DLS queried project readiness and the use of federal IIJA/IRA funds.
Andrew Grama of the Department of Legislative Services summarized the Maryland Department of the Environment’s (MDE) fiscal 2026 capital analysis, highlighting federal Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) funds impacting the FY26 budget and noting that those sources taper in later years.
Grama said DLS wants MDE to explain encumbrance schedules and project readiness for federal funds routed through the Water Quality Revolving Loan Fund and the Drinking Water Revolving Loan Fund. He flagged concern that few projects are applying for emerging contaminants funding and asked why a previously planned Anne Arundel County thermal processing demonstration facility was removed from the FY25 list.
Secretary Serena McQuillan told the committee the agency’s $412 million request prioritizes drinking water, wastewater modernization, Chesapeake Bay restoration, flood protection and resilience, and investments in overburdened and underserved communities. “Maryland is making huge progress in completing our lead service line inventory,” McQuillan said, adding that the initial inventory shows 1,000,000 service lines confirmed lead‑free, about 500,000 where the material is not yet determined, and 3,000 that require replacement. She said the state had secured $125 million in federal funds for at‑risk systems with an anticipated additional $60 million and that MDE will provide technical assistance to local systems seeking federal PFAS funds.
Grama also urged MDE to comment on Bay Restoration Fund revenue reporting timeliness and fluctuations; MDE said it will work to improve reporting and stressed the importance of long‑term funding as the Bay restoration fee is scheduled to be cut in half in 2030. Secretary McQuillan emphasized that capital funds support water quality, public health and climate resilience projects across Maryland and said MDE will work with local governments to improve project readiness for federal and state grant opportunities.
