By Adam Pagnucco.
Three key votes were taken this week by the county council and its committees that have begun shaping the FY26 operating budget that they ultimately approve. Let’s examine them.
The GO Committee voted against the property tax increase.
All three members of the Government Operations and Fiscal Policy (GO) Committee voted against County Executive Marc Elrich’s recommended 3.5 cent, $56 million property tax increase. If approved, the resulting weighted average property tax rate would be the highest level in decades.
Council Member Andrew Friedson spikes the football on Facebook.
Adding together the three GO Committee members (Chair Kate Stewart, Andrew Friedson and Sidney Katz) and two other council members who previously opposed it (Laurie-Anne Sayles and Evan Glass), the chances for passage of the property tax increase look dim. Even Elrich abandoned it, preferring to raise income taxes instead. But this is the council, so nothing is dead until we actually see the body and get it confirmed by the coroner. And of course, Elrich’s income tax hike awaits the council’s verdict.
The Education and Culture Committee voted to fully fund MCPS’s operating budget.
All three members of the Education and Culture (EC) Committee voted to fully fund the operating budget requested by the school board. This is no surprise. Of five options presented by council staff, the EC members (Chair Will Jawando, Gabe Albornoz and Kristin Mink) picked Option 1, which fully funds both Superintendent Thomas Taylor’s recommended budget plus a $19.6 million teacher pension shift mandated by the state. If the council does not fund extra money for the pension shift, MCPS would have to fund it from any appropriation it receives. The council must now find that extra money assuming that it agrees with the EC Committee.
However, that money won’t be hard to find. In a prior post, I noted how the General Assembly’s new limitations on charitable contribution deductibility for high earners was estimated by the Bureau of Revenue Estimates to produce an extra $21.4 million in income tax revenues for Montgomery County using 2023 tax data. That new money offsets the pension shift without any need for an additional tax increase.
The council unanimously voted to approve the county government’s collective bargaining agreements.
MCPS and the county government together have six unions. Three (MCEA, SEIU Local 500 and the school administrators) negotiate their collective bargaining agreements with the superintendent, which then require approval by the school board. The county executive and the council are not directly involved with these negotiations, although the council must approve adequate funding to finance them. Three others (MCGEO, the fire fighters and the police) negotiate their agreements with the county executive. The council must then fund all items in those agreements that require money. Earlier this week, the council unanimously voted to approve agreements with the latter three unions.
I will have a lot more to say about compensation soon, but here is the short version: the executive regularly negotiates, and the council regularly (but not always) approves combined general wage adjustments and service increments ranging from 5% to double digits every year. According to council staff, compensation accounts for 72% of the combined budgets for the county’s four major agencies (the county government, MCPS, Montgomery College and Park and Planning). This year, the executive’s budget recommends a 7.1% compensation increase in county government and a 9.5% compensation increase in the four agencies overall. In total, the compensation increases amount to $416 million in FY26, or roughly 80% of the new money in Elrich’s budget.
When the council approves such increases, it locks in a large chunk of spending in the executive’s budget. Consider this quote from Council Member Marilyn Balcombe in Bethesda Today.
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“The council has a fiduciary responsibility to approve a budget and make sure that we have the necessary services for our community without overburdening them with taxes and fees, and at this point in the budgetary process, I don’t see how that’s done,” councilmember Marilyn Balcombe (D-Dist. 2) said prior to Tuesday’s vote…
Prior to the vote, Balcombe noted that while she supports the contracts and compensation packages, she is concerned that paying for them as presented leaves few opportunities to make cuts to County Executive Marc Elrich’s (D) proposed $7.65 billion county operating budget in order to avoid raising taxes.
“What is most frustrating about the budgetary process is that once this compensation decision is made today, there is very little discretionary cost left to cut,” Balcombe said. “We’re really just nibbling around the edges.”
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Last month, I laid out a path by which the council could fully fund MCPS, grow the rest of the government at a rate exceeding inflation and do it without a tax increase. That math can work but only if the council begins carving out some room for itself to increase spending by a little less than Elrich wants to. (We are talking about different rates of spending increase, folks – not actual cuts!)
Will the council do it? We will know soon enough.