Today, the State’s Capital Debt Affordability Committee (CDAC) approved a recommendation to set the State’s bond authorization at $900 million for fiscal year 2023.
The committee, chaired by State Treasurer Nancy Kopp, expressed cautious optimism about the State’s fiscal health while considering the limit on new state capital debt for the next fiscal year.
After a lively discussion and several staff presentations, the committee settled on a recommendation of $900 million. Kopp was the only member to vote against the proposal, which falls below the committee’s $1.095 billion recommendation for fiscal 2021 and 2022.
Pointing to a $2.5 billion budget surplus and an influx of federal funding via COVID relief measures, Comptroller Peter Franchot suggested that Maryland’s economic forecast points to “a state of recovery,” but that “we aren’t out of the woods, yet.”
Kopp emphasized the committee’s responsibility to focus on the guidelines by which it operates and allow the Governor and General Assembly to make further decisions using PAYGO (pay-as-you-go funds) and general maintenance funds.
The Capital Debt Affordability Committee must 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. Although the committee’s estimates are advisory only, the Governor is required to give due consideration to the committee’s findings in determining the total authorizations of new State debt and in preparing a preliminary allocation for the next fiscal year.