By Adam Pagnucco.
Lisinopril and atenolol are effective treatments for high blood pressure. If you do not already use these medications or others to manage cardiac issues, you may see fit to seek them after reading this column.
That’s because Montgomery County’s new property tax bills were published yesterday. And just as we predicted, MoCo homeowners who have viewed them are experiencing sticker shock they have not seen for many years.
As we have previously reported, the county council replaced County Executive Marc Elrich’s recommended increases to income and property tax rates with a plan instituting progressive income tax brackets along with repeal of the $692 Income Tax Offset Credit (ITOC) received by three-quarters of county homeowners. The latter plan resulted in a net $102 million tax increase on homeowners. While the council approved a smaller dollar amount tax increase than Elrich wanted, its targeted nature against homeowners receiving the ITOC guaranteed special pain for them.
To see what this means for you, you can use the county’s tax bill database to view a history of your property tax bills. I used that system to calculate the chart below showing the history of my home’s property tax bills since 2012. I also included changes to the local CPI-U as a comparison with inflation. My property tax bill increase for 2026 is 25%.
63% of my tax bill increase was caused by loss of the ITOC. Another 31% of the bill increase was due to an assessment increase. (We will discuss assessments in more detail below.) The rest was caused by increases in solid waste and water protection fees.
There is nothing remarkable about my property, which is located in an unincorporated area and receives no tax credits other than the ITOC. Let’s bear in mind that more than 190,000 MoCo households get the ITOC, meaning that they will also get big tax increases. Other folks have begun checking their tax bills. Below is the text of one comment from a long-time resident sent to the council yesterday.
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I saw my property tax bill today. My overall real estate taxes INCREASED by $1,332.69! That crock of crap from Fani-Gonzalez about “95 percent of County wage earners will receive an income tax break” is just that — a crock of crap. I am not a wage earner. I am retired and live on a pension and social security.
By your vote against the ITOC and overall not reducing expenditures in your almost $8B FY27 budget, as a retired senior on a fixed income, this is the last straw!
I am angry and upset that I can no longer afford to live in the county of my birth and in my home in Aspen Hill.
Don’t give me that bs line about affordability options for seniors. I am among many in MoCo with a pension and social security that to date, has made my life comfortable, but with an income above what would qualify for tax relief.
This is now my “nudge” to move to Delaware. Maryland’s taxes and fees under Moore are much too high and now that MoCo has joined him with making our lives unaffordable, I have options to bail from my home state and county.
Thanks for forcing me to make this decision, as sad as it is. By 2027, I’ll be gone. I am very very very angry!
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The loss of the ITOC is bound to damage homeowners, with the largest percentage tax increases applying to those with low incomes and/or low value homes. Yes, most folks will receive small income tax cuts, but no homeowner formerly receiving the ITOC will benefit on net. This is a big tax hike that will be borne by three-quarters of county homeowners while commercial owners will be responsible only for rising assessments.
Let’s discuss assessments. Like the rest of the state, assessments in MoCo are set by the State Department of Assessments and Taxation. The county is divided into three geographic groups, each of which has triennial assessments phased in over three year periods. The chart below shows a history of those assessment changes since 1999. The three geographic groups are shown in differently colored bars. Remember that these are three-year changes, so a 9% increase over three years is equivalent to a slightly less than 3% annual change.
Assessments are sensitive to the business cycle. Twenty years ago, MoCo (and most of the rest of the country) was undergoing a real estate boom. Three-year assessment increases exceeded 40% for four years in a row. Homeowners eligible for the state’s homestead property tax credit were partially protected from the tax consequences of those assessments but bill hikes were nonetheless substantial. The Great Recession then reduced assessments, although certainly not to pre-boom levels.
Since then, assessment growth has returned to levels closer to the rate of price inflation. The current county government has benefited from the highest level of sustained assessment increases since before the Great Recession, averaging around 5.5% per year over the last four years. That should have been enough to sustain reasonable growth in the county’s budget. However, the county nevertheless raised property taxes three years ago and abolished the ITOC this year. The combined effect of those two measures is a large property tax increase especially targeted at homeowners.
Many council members will say they voted against repealing the ITOC. The truth is that repeal relied on two votes: a straw vote on repeal and a separate vote on the budget resolution implementing repeal. Council Members Marilyn Balcombe, Shebra Evans, Natali Fani-González, Sidney Katz, Dawn Luedtke and Kate Stewart voted to repeal in a straw vote. On the budget resolution vote, all council members except Andrew Friedson and Luedtke voted to repeal. That means every council member except for Friedson bears at least partial responsibility for this year’s tax hike on most homeowners.
And it gets worse. This year’s budget – infamously nicknamed the Kicking the Can budget – contains a structural deficit for next year of nearly $300 million. Unless the next executive and council find a way to reduce county government spending growth, that guarantees that this year’s big tax increase on homeowners will not be the last.