Montgomery County Council approved $7.9 billion budget on May 21 | The Locally Times
The council rejected proposed property and income tax hikes, providing $250 to $450 in tax relief to most households.
The Montgomery County Council approved a $7.9 billion operating budget on May 21, 2026, rejecting the County Executive’s proposed 6.1% property tax increase and 3.3% income tax hike. ## Tax Relief for Residents The new tax structure changes annual tax liabilities for renters and homeowners. A renter earning $50,000 receives $250 in tax relief under the approved budget, whereas the Executive's proposal would have resulted in a $50 tax increase. A homeowner earning $150,000 with a property assessed at $645,000 and no Income Tax Offset Credit receives a $450 tax break. The Executive’s plan would have cost that same homeowner $506 more, creating a $956 difference in annual tax liability. ## School Funding Increases The budget allocates $3.7 billion to Montgomery County Public Schools (MCPS), the district serving 156,000 students across 211 schools, for the 2027 fiscal year. This funding represents a $143.7 million increase over the previous year and exceeds the state-mandated Maintenance of Effort (MOE) level—the minimum funding required by state law—by $156.6 million. The council has funded MCPS above the MOE level for over a decade, with total contributions exceeding $956 million above the required minimum between fiscal years 2017 and 2027. ## Spending Growth and Reserves The council reduced the growth rate of government expenditures to 4.4% for the 2027 fiscal year, down from the 5.7% proposed by the County Executive. The budget maintains reserve funding at the levels recommended by the Executive to protect the county’s triple-A bond rating. The Operating and Capital Budget Updates record does not specify which departments or service areas face spending cuts to achieve this growth rate, nor does the documentation detail the specific income brackets defining the new progressive tax structure. ## Budget Implementation The $7.9 billion operating budget includes a $1.3 billion capital budget and a $6.3 billion Capital Improvements Program (CIP), the six-year plan for major infrastructure and facility construction, covering the 2027–2032 period. The council approved these measures on May 21. ## Key Questions **How much will my income taxes change?** Under the new progressive structure, 95% of residents will see income tax savings compared to the previous year, including $250 in relief for a renter earning $50,000. **Did the council raise property taxes?** No. The council rejected the County Executive’s proposed 6.1% property tax increase, maintaining the current property tax rate. **How much is the county spending on schools?** The council approved $3.7 billion for Montgomery County Public Schools, which is $156.6 million above the state-mandated minimum funding level.