MDOT overview: record capital plan, federal‑fund closeout questions and growing debt issuances
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Summary
DLS told a subcommittee MDOT’s FY27 operating and capital totals exceed $7 billion, the six‑year consolidated transportation program approaches $22.6 billion, and recent OLA audit findings prompted MDOT to promise corrective actions for federal grant closeouts; MDOT also plans substantial new bond issuances including GARVEE financing for the MTA light rail modernization program.
Department of Legislative Services analysts and MDOT officials briefed the subcommittee on Feb. 6 about the department’s FY27 budget, the Transportation Trust Fund forecast, federal closeout audit findings, and debt plans.
DLS analyst Samuel Quist said operating and capital spending in FY27 totals just over $7 billion, with special funds from the Transportation Trust Fund and $1.6 billion in federal funds forming large shares of the program. The six‑year consolidated transportation program totaled roughly $22.6 billion in the January forecast; the largest capital increases are in the State Highway Administration and Maryland Transit Administration. DLS also described enacted revenue increases that it estimates will raise about $4.9 billion through FY31 and observed that capital spending is projected to peak in FY28.
Quist flagged recent Office of Legislative Audits findings that raised concerns about unsupported federal‑fund revenue entries and expenditures within SHA and MTA closeout transactions. Acting Secretary Katie Thompson told the committee MDOT does not agree with OLA’s findings as a matter of compliance but acknowledged administrative problems stemming from rapid increases in federal fund usage and staffing shortfalls. “There is no noncompliance with federal law,” she said, characterizing the items as “housekeeping problems” and promising new hires, documented procedures and IT improvements to ensure timely reimbursement requests.
The DLS debt service analysis reviewed consolidated transportation bonds, grant anticipation revenue vehicle (GARVEE) bonds and nontraditional debt. DLS reported FY27 CTB debt service at $452.9 million (up $33.7 million) and showed planned new bond issuances totaling roughly $785 million in FY27, including an anticipated GARVEE issuance of $275 million to help finance the MTA light rail modernization program.
Thompson described recent MDOT bond sales and a refinancing that produced debt service savings and said the department concurs with DLS’s recommended budget‑bill reporting language on capital program changes and nontraditional debt. Committee members asked for periodic updates on progress addressing OLA audit recommendations and for additional transparency on federal receivables and closeouts.
DLS and MDOT committed to follow‑up reporting; no votes were recorded during the hearing.