The Montgomery County Council is hosting a public hearing Tuesday on a potential income tax rate increase proposed by Montgomery County Executive Marc Elrich (D) to help fund the county operating budget for the upcoming fiscal year.
Councilmembers will also introduce a zoning text amendment (ZTA) that would restrict where cannabis dispensaries can be located and host a public hearing on funding the purchase of relocatable classrooms for Montgomery County Public Schools (MCPS).
The council will meet at 11:15 a.m. in the Stella Werner Council Office Building in Rockville for its regular weekly business meeting. Here’s what to expect:
Income tax hearing
The council will hear from the public on Elrich’s controversial proposal to increase the county’s income tax rate from 3.2% to 3.3%.
The proposed increase is part of Elrich’s recommended $7.65 billion county operating budget plan for fiscal year 2026, which begins July 1. The spending plan represents a substantial increase of 7.4% from the county’s current $7.1 billion operating budget.
Elrich originally proposed a 3.4% property tax rate increase to fund the MCPS $3.65 billion operating budget request for fiscal year 2026, but replaced that proposal last month with the income tax proposal.
Most councilmembers are wary of approving Elrich’s proposed income tax increase, expressing concerns at a work session last week that it would not be responsible to raise taxes on residents when thousands have been laid off from federal jobs and some economic experts predict a recession is on the horizon due to changes by President Donald Trump’s administration.
But a few councilmembers have advocated for the increase, saying it is necessary to fund the entire MCPS budget request.
With a new funding proposal introduced just weeks before councilmembers are required to adopt a final budget plan, the council is on a tight timeline to decide whether to adopt Elrich’s recommendation. The council is required to make a formal decision on Elrich’s tax proposal by Thursday if a tax increase is to be implemented in fiscal year 2026. The council is currently slated to take action Wednesday on the proposal.
Cannabis dispensary zoning restrictions
Councilmembers Sidney Katz (D-Dist. 3) and Gabe Albornoz (D-At-large) are expected to introduce a ZTA on Tuesday that would prohibit licensed cannabis dispensaries within 100 feet of residential buildings and lots zoned for residential use.
The proposal is enabled by legislation passed by the Maryland General Assembly earlier this year that created new regulations and standards for cannabis retailers in the state. Gov. Wes Moore (D) signed the bill into law April 22. Marijuana was legalized for recreational use and sale in Maryland in 2023.
One aspect of the new state law allows local governments to establish zoning boundaries between residential buildings and dispensaries.
A public hearing on the legislation is scheduled for June 17.
MCPS relocatable classroom funding
The council will hear from the public Tuesday on a proposed supplemental budget appropriation of $5 million to purchase relocatable classrooms for MCPS.
At Elrich’s request and recommendation, the council is being asked to consider accelerating the period in which MCPS is slated to receive funding to purchase and prepare relocatable classrooms so they can be ready for use in time for the 2025-2026 school year, which starts Aug. 26.
The funding had been approved as part of the county’s Capital Improvement Program (CIP) for fiscal years 2025-2030. However, MCPS is not slated to receive the funds to purchase the relocatable classrooms until fiscal year 2026. If the council approves the request to accelerate the funding, the school system would be able to proceed with contractual work on the project prior to the start of the fiscal year.
The school system has 454 relocatable classrooms and facilities in use across the district, a mixture of which are leased or owned by the school system, according to the council agenda packet. The funding would replace some aging units.
