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The joint GO and PS Committee will review the FY26 Operating Budgets for the following item:
Property Tax Options: Amount, Rate and Income Tax Offset Credit
Review: The GO Committee will review the County Executive’s recommendations for the weighted real property tax rate and the Income Tax Offset Credit (ITOC). The ITOC provides a tax credit to owner-occupied properties in the County. The County Executive also submitted an amendment to this proposal recommending an increase to the County income tax rate instead of increasing the property tax rate, as proposed here. Details about the proposed County income tax rate increase are provided in the next GO Committee agenda item.
The Executive’s amended property tax recommendations, submitted on April 24, propose a weighted real property tax rate of $1.0255 per $100 of assessed value, without a 3.5 cent MCPS supplemental rate, as had been proposed on March 14. In addition, the amended proposal included an ITOC value of $752 for all eligible properties. The County Charter requires an affirmative vote from all current Councilmembers to approve a weighted real property tax rate for the next fiscal year that exceeds the weighted rate of the current fiscal year.
Resolution to increase County income tax rate
Review: The GO Committee will review a resolution to change the County income tax rate for Tax Year 2025 (Jan. 1 to Dec. 31, 2025) to 3.3 percent as proposed by the County Executive. The Council sets the County income tax rate by resolution. The current income tax rate of 3.2 percent was set by the Council on May 14, 2003.
The Council must act before May 15, 2025, if it elects to increase the income tax rate with an effective date for Tax Year 2025 as required by the state’s enacted Budget Reconciliation and Financing Act of 2025. According to Maryland Code, as amended by the General Assembly on April 7, 2025, through House Bill 352, the County may increase the County income tax to 3.3 percent of an individual’s Maryland taxable income for a taxable year beginning after Dec. 31, 2024. A public hearing is scheduled for May 13.
The GO Committee also will review the FY26 Operating Budgets for the following item:
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Working Families Income Supplement: The County Executive recommends an increase of more than $3.1 million, or 29.2 percent, from the approved FY25 Operating Budget. The change reflects increased costs due to actual state billing. The Working Families Income Supplement NDA provides funds to supplement the state's Refundable Earned Income Tax Credit (EITC). The County Executive has recommended increasing the County’s match of the state EITC from 56 percent to 65 percent. This proposal would add more than $5 million to FY26 costs.
The Health and Human Services (HHS) Committee will continue to review the FY26 Operating Budget for the Department of Health and Human Services (DHHS).
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Department of Health and Human Services (DHHS) Follow-Up: The County Executive submitted amendments on April 24, recommending an increase of more than $5.5 million from the approved FY25 Operating Budget. The recommendation includes an increase of more than $2.8 million for development disability service providers, $177,000 for Services to End and Prevent Homelessness, and $2.5 million for the Community Reinvestment and Repair Fund.
Amendment to the FY25-30 Capital Improvements Program and Supplemental Appropriation #25-60 to the FY25 Capital Budget, Montgomery County Government, Department of General Services, Montgomery County Public Schools (MCPS) Bus Depot and Maintenance Relocation in the amount of $10,550,000 (source of funds is the Recordation Tax Premium)
Review: The joint TE and GO Committee will review a $10.5 million supplemental appropriation for the MCPS Bus Depot and Maintenance Relocation Project. The request is in response to an opportunity identified by the Department of General Services (DGS) to relocate a portion of MCPS buses, which are currently housed at Crabbs Branch Way/Jeremiah Park, to 861 Gude Dr. The funding is needed to provide for the build-out of facilities at Gude Dr.
The Council previously received a briefing on the existing project at a meeting held on April 23, 2024. This project provided funding to conduct community engagement, project scope and preliminary design activities for a new transit facility, which would be shared by Ride-On and MCPS school buses on the property of the current Shady Grove MCPS Transportation Depot at Crabbs Branch Way. According to the MCDOT, the new depot is needed by 2030 to meet the department’s 2035 zero-emission goals.
The joint TE and GO Committee will review the following FY26 Operating Budget item:
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Montgomery County Green Bank NDA: The County Executive recommends a decrease of $3.4 million, or 17.6 percent, from the approved FY25 Operating Budget. The recommendation includes a $2.2 million discretionary reduction to reduce the County’s contribution to the Green Bank from 10 percent to 8.75 percent of energy tax revenues. An additional $1 million reduction is due to lower projected energy tax revenue in FY26 compared to FY25.
The TE Committee will review the FY26 Operating Budget for the following items:
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Department of Transportation - General Fund: The County Executive recommends a net increase of more than $3.7 million, or 5.9 percent, from the approved FY25 Operating Budget for the Transportation General Fund. The increase includes $208,581 in programmatic and staffing enhancements as well as a more than $4.1 million increase for compensation adjustments and required operating expenses.
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Homeowners Association Roads Reimbursement NDA: The County Executive recommends no increase from the $62,089 approved FY25 Operating Budget for the Homeowners Association Road Reimbursement Program NDA.
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Weather Response NDA: The County Executive recommends no increase from the more than $2.8 million approved FY25 Operating Budget for the Weather Response NDA.
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Vision Zero NDA: The County Executive recommends an increase of $146,167, or 39.1 percent, from the approved FY25 Operating Budget for the Vision Zero NDA, which includes a $13,833 increase for compensation adjustments and other personnel costs.
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Department of Transportation - Parking Lot Districts: The County Executive recommends an increase of $1.5 million, or 5.4 percent, from the approved FY25 Operating Budget for the Parking Lot Districts. The recommendation includes $90,796 in programmatic and staffing enhancements and a $1.5 million increase for compensation adjustments and required operating expenses.
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Rockville Parking District NDA: The County Executive recommends an increase of $3,100, or 0.7 percent, from the approved FY25 Operating Budget for the Rockville Parking District NDA, which is in line with the Memorandum of Understanding (MOU) between the City of Rockville and the County.
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