The Capital Debt Affordability Committee (CDAC) met on October 1 and amended its earlier recommendation to authorize $925 million in State general obligation bonds for the FY 2014 Capital Budget. After some debate, CDAC recommended an additional FY 2014 authorization of $150 million (for a total of $1.075 billion). The recommended increase in debt would not violate the State’s self-imposed debt guidelines.
State Treasurer Nancy Kopp began the meeting with a reminder of the limits on the committee’s authority. CDAC’s role is to recommend a maximum debt amount to the Governor and General Assembly in consideration of the State’s wealth and the amount of the State’s budget that will be spent on debt service.
Maryland Comptroller Peter Franchot was the only CDAC member to vote against the recommendation, arguing that possible federal spending cuts and global market predictions warn against additional borrowing. He described the proposal as “having our cake and eating it too.”
Secretary of Budget and Management T. Eloise Foster explained that the increase was an “affordable request,” and that federal sequestration and other economic factors were considered in the analysis. According to the Secretary’s report, the $150 million will create jobs and allow the State to fund new shovel-ready initiatives.