Maryland’s Debt Affordability Committee voted today on recommended debt levels for FY 2016 to guide the Governor and General Assembly in their budget decisions this coming year.
The Capital Debt Affordability Committee (CDAC) chaired by State Treasurer Nancy Kopp, approved a recommendation during its meeting on October 1 to follow the planning assumptions used in its 2013 report, which increases the State’s bond authorization by $75 million to $1.170 billion for FY 2016. The 2013 report also proposes increasing the State’s bond authorization by $75 million in each of the next four fiscal years, through FY2019. However, this year, the Committee only approved an increase in the bond authorization for FY 2016. The vote to approve the recommendation was 4-1.
The materials and draft recommendations distributed at the meeting include an affordability analysis as well as multi-year projections for debt service and debt outstanding, plotted against the 8% and 4% benchmarks. CDAC’s recommendation for an additional $75 million bond authorization, maintains the State’s debt affordability ratios within the CDAC benchmarks of 4% debt outstanding to personal income and 8% debt service to revenues.
The Capital Debt Affordability Committee, created pursuant to Section 8-104, et seq., of the State Finance and Procurement Article, is required to submit to the Governor and the General Assembly each year an estimate of the maximum amount of new general obligation debt that prudently may be authorized for the next fiscal year. The October 1 recommendation will be forwarded on to the Governor and General Assembly for their consideration.
For more information, see the Capital Debt Affordability Commitee and our previous posts on Conduit Street, CDAC Releases Report Recommending FY15 State Debt Level, and Capital Debt Affordability Committee Approves Recommendation to Increase the State’s Bond Authorization