Budget pressure in the state of Maryland is not slowing down infrastructure investment as the state Department of Transportation provides details on a $21.2 billion budget that includes $155 million going towards debt service.
"Maryland deserves and demands to have a safe and reliable transportation system that is accessible for all to use and helps drive our ability to make this Maryland's decade," said Maryland Transportation Secretary Paul J. Wiedefeld.
"With a focus on enhancing safety, equity and sustainability, this Final CTP makes statewide strategic investments that strengthen our existing system to efficiently serve all Marylanders and grow the state's economy."
The budget lays out the goals of the state's Consolidated Transportation Program, for fiscal years 2025-2030 which includes a boost of $420 million in state transportation funding annually, beginning in fiscal year 2026.
The wide-ranging program encompasses highway safety projects, light and heavy rail investments, port improvements, and addressing airport safety needs.
The $420 million tranche includes $200 million in new state resources for capital projects, $155 million to meet commitments for debt issued to fund the capital program, and $65 million for operating budget needs.
In September 2024, Moody's Ratings upgraded Maryland Consolidated Transportation bonds to Aaa from Aa1 but applied a negative outlook.
Per the Moody's analysis, "The upgrade to Aaa incorporates Maryland's issuer rating (Aaa, negative) and strengths of the Consolidated Transportation bonds, including coverage of maximum annual debt service equal to 6.2 times."
"Maryland's negative outlook incorporates difficulties the state will face to achieve balanced financial operations in coming years without sacrificing service delivery goals or increasing the tax burden on individual and corporate taxpayers."
The announcement comes in conjunction with Gov. Wes Moore revealing that the state DOT is slotted to receive $3.63 billion in his proposed 2026 budget.
The first draft of Moore's budget pencils out at $67.3 billion and still needs to pass through the Maryland General Assembly. The state is facing a $3 billion
According to the Governor's plan, the proposal "reduces the structural deficit by $2.25 billion for fiscal 2026, maintains a reserve balance of 8% and flips the projected cash shortfall of $2.95 billion to a positive cash ending balance."
"By prioritizing economic growth, modernizing government, and making taxes simpler, fairer, and for the vast majority of Marylanders, lower, we will weather this storm and emerge stronger," said Moore.
"I look forward to partnering with the Maryland General Assembly to tackle this historic budget crisis and set Maryland on a path of sustainable economic growth."
The proposed budget includes a 15% increase in the sports wagering tax rate, increasing the table game tax rate from 20% to 25% and increasing the cannabis tax rate from 9% to 15% effective in fiscal year 2027.
Earlier this month, S&P Global Ratings gave the state a AAA rating while also placing it in 33rd place for is available reserves per percentage of revenue rating with a ratio less than 20%.
The state scored a transportation funding victory during the contentious federal budget negotiations when funding was secured to repair the Francis Scott Key Bridge that was partially destroyed by a cargo freighter in March 2024.
