State Highway Administration defends federal fund management as audit flags $359M in project charges
March 07, 2026 | Public Safety, Transportation, and Environment Subcommittee, Budget and Taxation Committee, SENATE, SENATE, Committees, Legislative, Maryland
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Kelly Norton summarized the Department of Legislative Services review of the State Highway Administration's (SHA) FY27 budget and capital program and highlighted several issues members pressed about including federal fund accounting, rescinded grant awards and snow removal spending.
DLS noted that SHA's fiscal 2027 allowance increases in several areas and that grant rescissions tied to recently enacted budget language removed about $36.2 million in grant awards. Norton told the committee that exhibit data showed a small share of bridges rated poor or worse in calendar 2025 (0.8%) but recommended SHA address the status of projects whose grant funding was rescinded and report whether they will be completed with other funds.
Will Pines, Maryland State Highway Administrator, framed the agency's spending shift toward federal funding over the past several years: "So we went from 60% state funding to now we are 70% federal funding," he said, describing a post‑COVID funding environment that increased SHA's federal workload. Pines acknowledged an Office of Legislative Audits finding that SHA had charged about $359 million in project expenses to federal projects for which expenditures were not authorized by Federal Highway, and said SHA has reduced the federal receivables balance to under $300 million while working with federal partners to recover eligible costs.
Pines said SHA is seeking eight positions in FY27 to manage federal reimbursements and the increased federal actions that rose from 32 federal actions in 2019 to 410 in 2024. Assistant Secretary Joe McAndrew stressed safety investments and workforce programs, including the Safe Routes to School grants and apprenticeship programs tied to federal funding streams.
Lawmakers pressed SHA about snow events and the winter maintenance budget: SHA reported winter expenses of about $101.3 million as of March 2, 2026—$37.1 million over the FY26 allotment—and discussed using contingency and underspending elsewhere to cover the shortfall. Senators proposed alternatives including a dedicated contingency (a "snowy day" fund); SHA said it will examine options but noted that DLS recommended a five‑year rolling average for budgeting.
On project prioritization, SHA cited data‑driven corridor selection for pedestrian safety investments and explained cost estimates: a planned 1.8‑mile corridor project at $18.2 million (about $10 million per mile) and an adjacent half‑mile segment estimated at roughly $5 million, a tradeoff SHA said would divert funds from corridors with higher documented crash rates.
The subcommittee asked SHA to provide additional detail on federal fund accounting, the status of rescinded grant projects, and the rationale for the requested FY27 positions to manage reimbursements and avoid backlogs.
No formal votes were taken; SHA agreed to follow up with supplemental materials and data requested by committee members.
DLS noted that SHA's fiscal 2027 allowance increases in several areas and that grant rescissions tied to recently enacted budget language removed about $36.2 million in grant awards. Norton told the committee that exhibit data showed a small share of bridges rated poor or worse in calendar 2025 (0.8%) but recommended SHA address the status of projects whose grant funding was rescinded and report whether they will be completed with other funds.
Will Pines, Maryland State Highway Administrator, framed the agency's spending shift toward federal funding over the past several years: "So we went from 60% state funding to now we are 70% federal funding," he said, describing a post‑COVID funding environment that increased SHA's federal workload. Pines acknowledged an Office of Legislative Audits finding that SHA had charged about $359 million in project expenses to federal projects for which expenditures were not authorized by Federal Highway, and said SHA has reduced the federal receivables balance to under $300 million while working with federal partners to recover eligible costs.
Pines said SHA is seeking eight positions in FY27 to manage federal reimbursements and the increased federal actions that rose from 32 federal actions in 2019 to 410 in 2024. Assistant Secretary Joe McAndrew stressed safety investments and workforce programs, including the Safe Routes to School grants and apprenticeship programs tied to federal funding streams.
Lawmakers pressed SHA about snow events and the winter maintenance budget: SHA reported winter expenses of about $101.3 million as of March 2, 2026—$37.1 million over the FY26 allotment—and discussed using contingency and underspending elsewhere to cover the shortfall. Senators proposed alternatives including a dedicated contingency (a "snowy day" fund); SHA said it will examine options but noted that DLS recommended a five‑year rolling average for budgeting.
On project prioritization, SHA cited data‑driven corridor selection for pedestrian safety investments and explained cost estimates: a planned 1.8‑mile corridor project at $18.2 million (about $10 million per mile) and an adjacent half‑mile segment estimated at roughly $5 million, a tradeoff SHA said would divert funds from corridors with higher documented crash rates.
The subcommittee asked SHA to provide additional detail on federal fund accounting, the status of rescinded grant projects, and the rationale for the requested FY27 positions to manage reimbursements and avoid backlogs.
No formal votes were taken; SHA agreed to follow up with supplemental materials and data requested by committee members.
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