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MDE seeks $481.4M in FY27 capital funds; IIJA boosts drinking-water and lead-service-line work
Summary
The Maryland Department of the Environment requested $481.4 million for FY27, driven by federal IIJA PAYGO funds and a $50 million shift to GO bonds for Bay Restoration Fund wastewater projects. Officials said $43.5 million in federal lead service-line funding will support replacements and inventories; agency staff pledged follow-up on timelines.
The Maryland Department of the Environment asked the Capital Budget Subcommittee to approve a $481.4 million FY27 capital request that officials said reflects a peak year of federal Infrastructure Investment & Jobs Act (IIJA) funds.
DLS analyst Andrew Gray told the panel the request includes about $217.4 million in PAYGO federal funds and $94.3 million in general-obligation bonds. He said $50 million in GO bonds are being used in FY27 to replace Bay Restoration Fund special-fund wastewater project funding, and that IIJA dollars have shifted the federal funding mix in the revolving loan programs.
Secretary Serena McElwain said MDE is using the IIJA peak “to support drinking water infrastructure, wastewater treatment upgrades, Chesapeake Bay restoration, hazardous substance remediation, and flood resilience,” and described the department’s approach to project readiness and technical assistance.
On lead service lines, McElwain and program manager Adrianna Caldarelli outlined a $43.5 million federal program split between $41.3 million for projects and $2.3 million for administration and technical assistance. Caldarelli said work is moving from inventories toward replacements: “We’ve got a project list that will be going public very soon. On that project list, there are 28 projects that are currently slated for funding. Seventeen of those projects are now dedicated to full replacement rather than just mapping.”
DLS flagged low average encumbrance levels in both the water-quality and drinking-water revolving loan funds and asked MDE how it will accelerate project delivery; Gray also asked why no applications were received for IIJA emerging-contaminants (PFAS) construction-ready funds and recommended the agency explain that gap. McElwain said MDE transferred $10.6 million in IIJA emerging-contaminants funds to the drinking-water revolving loan fund to avoid letting those dollars sit idle and to support ready-to-proceed treatment projects.
Members pressed MDE for timing on when inventories will shift fully to replacements; Caldarelli said the department will provide additional timeline details offline. Officials also warned the panel that the Bay Restoration Fund is scheduled to sunset in 2030 and that if revenues decline as projected the ability to sustain wastewater-plant lifecycle work could be “reduced almost by half.”
Next steps: agency staff committed to follow-up on a public project list and on questions about encumbrance timing and PFAS funding utilization.
