This story was updated at 3 p.m. March 15, 2023, to include more comments.
County Executive Marc Elrich on Wednesday proposed a 10-cent property tax increase that, if approved by the County Council, would provide an additional $220 million for public schools this upcoming year, officials said.
The increase was unveiled alongside his roughly $6.8 billion operating budget proposal, which represents a roughly 8% increase over the county’s current $6.3 billion budget.
Roughly half of the county’s budget is allocated to Montgomery County Public Schools, whose budget is proposed by Superintendent Monifa McKnight and then the county’s Board of Education. In February, the county’s Board of Education unanimously approved an operating budget at $3.2 billion—an increase of 10% or $296 million over the current year.
The county’s current property tax rate is roughly 98 cents per $100 of assessed value. The proposal seeks to boost the rate to about $1.08. Chief Administrative Officer Rich Madaleno told reporters in a news briefing Tuesday that the additional $220 million in revenue from the supplemental tax increase would go solely toward education.
Business leaders, including from multiple chambers of commerce countywide, said they wanted to review Elrich’s proposal before making any immediate comments.
The proposal needs to be green-lighted by six of 11 County Councilmembers—including the tax rate. The council has until June 1 to make changes and finalize the budget.
County Council President Evan Glass (D-At-large) said that Wednesday’s budget introduction formally begins the council’s deliberations on the operating budget.
“As we undertake this important task, the Council will provide thorough oversight to ensure taxpayer investments are used prudently,” Glass said in a prepared statement. “We must balance the needs of today with those of tomorrow, which include supporting our schools, our teachers, our first responders, our healthcare professionals and other frontline workers.”
Madaleno said that the money was needed to help public schools, especially to address the implementation of the Blueprint for Maryland’s Future—a statewide education bill passed in 2020 that looks at revamping and improving public education—along with addressing learning loss issues faced by students since the COVID-19 pandemic and distance learning began.
In his budget message, Elrich wrote that the 10-cent tax increase was needed to help pay for more school staff and improve student performance.
“Taking inflation into account, the total per-student appropriation peaked around [fiscal year 2010] and has never fully recovered,” Elrich wrote. “In the past couple years, although nominal per-student spending has been going up, real spending (adjusted for inflation) has been slightly declining. In other words, our spending has not been keeping up with costs.”
In an interview Wednesday, Elrich defended his proposed budget, including the property tax increase. He noted that Washington, D.C. will soon be offering a starting salary of $75,000 for its teachers, far greater than the $60,000 annual salary that his budget would do.
In March 2020, Elrich asked for a nearly five-cent property tax increase, including a 3.1-cent supplemental property tax rate to be used exclusively for public schools. County Councilmembers rejected that increase.
When asked whether he had more political capital to get a 10-cent property increase done, Elrich said: “I think there’s a general acknowledgement that the school system’s in trouble. I don’t think people acknowledged that before… this has kind of made it stark, you have learning loss, you know there’s more special needs kids, you know there’s more [English as a second language] learners … and then you’re staring at [test] scores that don’t look good.”
Monifa McKnight, superintendent of Montgomery County Public Schools, said during Wednesday’s news briefing that the investment is meant to build on budgets in prior years. She added that last year, a reading coach was placed in every elementary school to address literacy issues.
McKnight urged those interested to watch the Board of Education on March 28 to see other “promising” data points that show recent improvement, but declined to share more information about that data.
Numerous news outlets had reported recently that Maryland was expecting a $478 million dip in revenue for the upcoming fiscal year. Madaleno said that county officials had already anticipated that there would be a potential economic recession in 2023, and that Elrich’s budget would not see any impacts.
“We reported to the [County] Council in December a mild recession for some point during calendar year [2023],” Madaleno said. “The state had not yet done that until last week. So, one way to look at it, is as if they’re simply catching up to our already conservative forecast.”
Elrich said this news, along with the fact that Gov. Wes Moore has already invested much of the state’s surplus into anti-poverty measures and to prevent cuts, is part of what went into the decision about the budget and property tax hike.
The county executive added that homeowners paying more in property taxes will see a return on their investment when they decide to sell. If schools were in major decline and property values were decreasing, it would have a greater financial impact on homeowners, Elrich said.
Elrich used the example of a resident owning a $600,000 house, paying an additional $600 in property taxes.
“If perceptions change about the schools, that’s going to reduce values more than $600,” Elrich said. “And so, this was an unusual circumstance. You actually can identify the need in terms of staff, and in terms of our wages versus everybody else’s wages, and our per-pupil spending versus everybody else’s per-pupil spending.”
