After months of deliberation, the Montgomery County Council unanimously passed Thursday a $7.6 billion county spending plan for fiscal year 2026 – with no tax increase required.
The council took a straw vote May 15 to approve the county operating budget that’s set to go into effect July 1. The council conducts the early vote so that its staff can finalize the correct legal language and any other changes regarding the budget before the final vote. While the council technically could have made changes between the two votes, doing so is uncommon and Thursday’s vote was largely seen as perfunctory. The budget passed Thursday without discussion.
“This was a difficult budget. Simply put, the multiplicity of needs in our community are growing, and the decisions we had to make were tough,” council President Kate Stewart (D-Dist. 4) said following the May 15 vote. “This has been exacerbated by chaos at the federal level.”
The county operating budget, which includes funding for Montgomery County Public Schools (MCPS), represents an increase of more than 7% from the county’s current $7.1 billion spending plan. It does not require a tax increase, despite efforts by County Executive Marc Elrich (D), who initially proposed a property tax rate hike before switching to a call for an income tax increase to help fund the $3.65 billion budget requested by MCPS.
The council rejected Elrich’s tax proposals and instead came to an agreement with MCPS to reallocate money from the school system’s retiree health benefit trust.
According to county and district officials, MCPS maintains a retiree health benefit trust to provide a funding reserve for health benefits for retirees in future years. However, the need to spend more now for current health benefit needs for employees and retirees is a major pressure on the proposed MCPS budget.
A plan proposed by Stewart and unanimously approved by the council last week will allow the school system to receive an additional $50 million – $25 million in fiscal years 2025 and 2026 — by increasing the school system’s annual drawdown from the retiree health benefit trust. This enabled the council to fulfill 99.8% of the MCPS request without raising taxes, requiring the district to reduce its proposed spending by about $8.6 million.
In a May 16 press release, Elrich called agreement “a temporary fix.”
“Over the next year, we must work together—the Council, Board of Education, MCPS leadership, and our labor partners—to identify stable, recurring funding sources,” he wrote.
Here are five things to know about the budget:
- MCPS is receiving a historic level of funding
The county government’s contribution of $2.3 billion to the overall $3.65 billion MCPS budget funds the school system at approximately $210 million above the state’s Maintenance of Effort funding level, which is the required level of per pupil funding that must be maintained by counties in Maryland year-over-year. This is the largest budget the council has ever approved for MCPS. The school system also receives funding from the state.
- RideOn bus service will be free for all riders
While youth younger than 18, older residents and county residents with disabilities have been able to ride county’s RideOn buses for free, that benefit has now been extended to all county residents. The current fare is $1, unless a rider holds a special Metro pass or other commuter pass that includes RideOn service.
- Spending increased for the county’s police and fire departments
The council approved a budget of $352 million for the Montgomery County police department, which represents an increase of $12 million from current fiscal year spending. The budget includes $274,000 to expand the Drone as First Responder program to Germantown. It is currently deployed in Bethesda, Wheaton, Silver Spring and Gaithersburg. It also includes funding to start a new Speed on Green automated traffic enforcement pilot project as well as other security and public safety enhancements throughout the county.
The Montgomery County Fire and Rescue Service will receive $310 million from the county, which is a 6% increase from its current spending. The budget includes enhancements for medical services programs, including the addition of a new Basic Life Support transport unit.
- Compensation is increasing for many unionized county employees
The council approved collective bargaining agreements with all the county’s employee unions, approving a bigger budget for wages and benefits over the current fiscal year. The budget includes $4.8 billion in tax-supported compensation and benefit costs, which is a 9.5% increase from fiscal year 2025 spending.
- County recreation spending is getting a boost
The council approved nearly $63 million in funding for the Department of Recreation, which is an increase of 5.6% from the current fiscal year budget. It includes increased funding for the Silver Spring Recreation and Aquatic Center, which opened in 2024, as well as additional funding to expand the Excel Beyond the Bell after-school programming to two more elementary schools: East Silver Spring and Waters Landing in Germantown. The council also approved a higher level of funding for Montgomery Parks than was initially suggested in Elrich’s proposal.
