State veterans projects on hold as federal award fails; bill to remove residency requirement key to cemetery grants

Budget analyst Yoshadar Arai told the Capital Budget Subcommittee that the new state veterans home project is "currently on hold" because the state did not receive a federal award for the project. As a result, the governor's fiscal 2026 budget proposes transferring $62,900,000 previously authorized in the Dedicated Purpose Account (DPA) to the general fund and canceling a fiscal 2025 federal appropriation of $47,900,000, Arai said.

Arai said the department's five‑year CIP includes two veterans cemetery expansion projects and that fiscal 2026 includes $113,000 in general obligation bonds for the Crownsville Veterans Cemetery expansion and improvement phase 4 project to continue project design. Arai said federal grant timing for both Crownsville and the Garrison Forest Veterans Cemetery expansion was delayed because the U.S. Department of Veterans Affairs requires no state residency requirement for eligibility, while current Maryland law requires veterans to be Maryland residents.

Arai said two departmental bills introduced in the 2025 session—House Bill 138 and Senate Bill 237—aim to remove the state residency requirement, which would make the projects eligible for the federal grant program. If the bills fail, Arai said, the projects could be further delayed and ineligible for federal awards.

Secretary Anthony Woods, Department of Veterans and Military Families, told the committee the department has signed a fund certification and is beginning design and engineering work for renovation of the Charlotte Hall Veterans Home. "We signed our fund certification and we're working in collaboration with EGS to begin a part 1 and part 2 analysis or design and engineering study," Woods said. He said the department continues efforts to reestablish working relationships with the U.S. Department of Veterans Affairs to pursue alternatives and federal funding opportunities.

Arai said the state's application for the new veterans home currently ranks 80 out of 81 projects on the USDVA priority 1 list; projects ahead of Maryland in the queue require roughly $1.1 billion to clear before Maryland's project would be eligible for award. The analysis also notes the state appropriated funds in prior years to meet a 35% upfront state-appropriation requirement; after the proposed transfer, $2,500,000 would remain in the DPA to complete design work.

Secretary Woods and committee members discussed alternative approaches including renovating Charlotte Hall and using other programs to prevent veteran homelessness. Woods provided 2024 counts showing about 312 unhoused veterans statewide (101 in emergency shelters, 173 in transitional housing, and about 38 unsheltered), and said the Maryland Veteran Trust Fund provides emergency grants for individual veterans. He also noted that Charlotte Hall's occupancy declined from 403 residents in December 2019 to 271 in December 2024.

Ending: The subcommittee requested briefings on the federal priority ranking and the likelihood of federal awards if the residency requirement is removed; no funding changes were finalized at the hearing.