By Adam Pagnucco.
As the county council begins reviewing County Executive Marc Elrich’s recommended FY27 operating budget, which contains both a property tax increase and an income tax increase, Council President Natali Fani-González has issued a stark warning to her colleagues. Bethesda Today carried this quote from the first day the council discussed the budget:
Some members of the County Council have already expressed an unwillingness to pass the budget as proposed. During Tuesday’s meeting, Council President Natali Fani-González (D-Dist. 6) said her colleagues who say they won’t support any tax increases should “get ready to propose some cuts.”
“You cannot have it both ways,” she said.
Fani-González is right that if her colleagues object to Elrich’s tax increases, they will have to adjust his budget to reflect lower revenues. But that does not mean that cuts are required. It will only require less of a spending increase.
Let’s use some very basic third grade math. Schedule A-1 of Elrich’s recommended budget (reprinted below) shows total operating expenditures of $7.632 billion in FY26 and, according to his recommendation, $8.02 billion in FY27. That’s an increase of $388 million, or 5.1%.
Elrich’s recommended $388 million spending increase includes two tax hikes: a 6.3 cent property tax increase and a 0.1% income tax increase. Those tax hikes are attracting concern from both council members and Democratic primary voters, the latter of whom overwhelmingly oppose a broad-based property tax hike. Let’s bear in mind that both of these tax increases apply to all residents, not just wealthy ones.
According to council staff, “each 1.0 cent property tax increase generates approximately $26.1 million in additional revenue.” The income tax increase would generate $24.4 million in revenue. Those tabulations enable us to evaluate the role of each of those tax increases in the budget.
Suppose the council were to say no to each tax hike. That would remove $165 million in property tax revenues and $24.4 million in income tax revenues, a combined amount of $189 million. However, the budget would still go up by $199 million, primarily due to rising incomes and rising property assessments. That would be an increase of 2.6%. According to the U.S. Bureau of Labor Statistics, the Washington-Arlington-Alexandria CPI-U grew by 2.7% between January 2025 and January 2026, so the county budget would rise at close to the current rate of inflation with zero tax rate increases.
Is it really so unreasonable to expect government spending to grow with inflation?
The council could split the difference as they did three years ago and adopt some of the tax increase but not all of it. If they did that, the rate of county spending growth would decline when compared to Elrich’s budget but it would not turn negative. Another alternative is Fani-González’s budget proposal, which would reduce the rate of tax-supported spending growth from the 5.7% proposed by Elrich to 3.3%.
THESE ARE NOT SPENDING CUTS. THESE ARE REDUCED RATES OF INCREASE.
I get why some politicians and interest groups would want to call these “cuts” because their obvious agenda is to maximize spending. The real sin here belongs to any media outlets who fall for this. I have seen it before: Politician X or Interest Group Y fears getting less of a spending increase than they covet, so they spread dread about “cuts” and the press blindly repeat it.
I expect to see this again unless third grade math finally prevails.