By Adam Pagnucco.
The great budget battle of 2026 appears to be over. And its result is a weary agreement by nine council members to kick the county’s budgetary can down the road. (Council Members Andrew Friedson and Dawn Luedtke voted no.) How much longer can this go on?
Let’s boil it down to this. The council had three jobs to do in this budget.
First, it had to reject the county executive’s unpopular tax increases. His recommended property and income tax rate increases would have raised a combined $189 million. The council rejected that approach, but its combined implementation of progressive income tax rates and the abolition of the $692 Income Tax Offset Credit (ITOC) received by homeowners will raise a net $102 million this year. Furthermore, the burden of this tax increase will fall disproportionately on low income homeowners, prompting County Executive Marc Elrich to brand it as “regressive.” I will have more to say about that, but because the council substituted a smaller tax hike for a bigger one, it has partially failed in this task.
Two, it had to make some progress on reducing County Executive Marc Elrich’s structural deficit in FY28, which council staff estimated at $257 million. Most of that deficit was caused by the executive’s use of $182 million in reserves for ongoing spending, a violation of county policy. I have not seen any evidence that the council has made a dent in this, but they are using a “one-time” diversion of $25 million in retiree health care money to finance MCPS’s FY27 operating budget. I put “one-time” in quotes because this is what they did when diverting retiree health care money last year. Additionally, the council’s decision to divert cash in MCPS’s capital budget flowing from the ITOC repeal towards MCPS operating expenditures is another use of one-time resources for ongoing spending. As a result of all of these maneuvers, I would not be surprised if the structural deficit for FY28 ultimately approaches $300 million, setting the stage for a repeat maelstrom next year. This is a big fail.
Three, the council had to slow the growth of government spending. The two biggest drivers of this growth are county government compensation, which has been rising faster than revenues for six straight years, and MCPS’s local contribution per pupil, which has been escalating rapidly and is locked in by state law. Council President Natali Fani-González tried to bend the curve on both of these issues but could not get votes from her colleagues to do so. I suspect the council’s approved budget will spend slightly less than Elrich’s recommendation but it won’t be that different. This is mostly a fail.
And so this is the ultimate kicking the can budget. It does little to address core spending, exacerbates structural deficits, relies on a tax increase likely to spike many homeowners’ property tax bills by 20% or more and will put the issues of taxes, employee raises and MCPS funding right back on the table for next year. This is getting to be a regular thing now. The days of Great Recession-era fiscal discipline promoted by County Executive Ike Leggett, Chief Administrative Officer Tim Firestine, council staff director Steve Farber and a crew of battle-hardened, ornery council members are long gone.
How much more of a road remains for this budgetary can to be kicked before it goes off a cliff?