J00J00 – Maryland Transportation Authority
Issues
1.
MDTA Financial Outlook
As a nonbudgeted entity, MDTA must balance operating and capital costs, including debt service, to manage their financial standard requirements while also keeping facilities in a state of good repair. As shown in Exhibit 12 , four financial standards guide MDTA: (1) rate covenant; (2) debt service coverage; (3) unencumbered cash; and (4) debt outstanding limits. Each standard has a threshold that is set either in statute or as an agency policy to ensure that MDTA is in good financial standing and able to cover its obligations, even if revenues unexpectedly decline.
Exhibit 12 MDTA Financial Standards
Financial Ratio
Requirement
Rate Covenant (Legal)
Net revenues greater than or equal to 1.0 times the sum of 120% of debt service and 100% of deposits to the Maintenance and Operations Reserve
Debt Service Coverage (Policy, Legal) Net revenues greater than or equal to 2.0 times annual debt service
Unencumbered Cash (Policy)
Cash greater than or equal to $400 million
Debt Outstanding Limit (Statutory)
$4.0 billion for toll revenue-backed debt
MDTA: Maryland Transportation Authority
Source: Maryland Transportation Authority
MDTA is mandated to submit a biannual financial forecast that covers the same six-year period as the current CTP. A summary of the forecast, including projected values for each of the four financial standards, appears in Exhibit 13. As noted previously, each standard has a threshold that is set either in statute or as an agency policy to ensure that MDTA is in good financial standing and able to cover its obligations, even if revenues unexpectedly decline or expenses unexpectedly increase. Due to significant increases in overall expenses, MDTA’s forecast relative to each of the financial standards decline during the forecast period. The unencumbered cash balance declines to equal the $400 million limit.
Analysis of the FY 2026 Maryland Executive Budget, 2025 20
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