‘A failure of choices’: County Council not sold on Elrich’s $8 billion budget proposal

County executive responds to concerns about use of reserves for ongoing expenses

April 9, 2026 9:55 a.m.

Montgomery County Councilmember Dawn Luedtke (D-Dist. 7) speaks during a meeting I December 2025. Credit: Benjamin Sky Brandt for the Montgomery County Council

Montgomery County Executive Marc Elrich’s final operating budget proposal landed with a thud at the County Council office building this week, with some councilmembers saying his spending over the past eight years has created a hole they will struggle to fill.

On Wednesday, Elrich responded during his weekly virtual media briefing to the criticisms of his proposed $8 billion spending plan, including his proposals to raise taxes and draw from the county’s reserves to cover expenses in fiscal year 2027.

“I guess I made a decision that I would do as little to harm people as I possibly could,” Elrich said of his thought process while crafting the proposed budget, adding that he made an effort to cut down on spending that didn’t have a “direct human impact.”

“The only way you’re going to get more reserves — and basically hold onto taxpayer money and not spend it — is if you’re going to wind up cutting services much more deeply,” he continued. “I’m not sure how that’s a good thing to do.”

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Elrich’s proposed operating budget for fiscal year 2027 represents a $420 million — or 5.5% — increase over the county’s $7.6 billion operating budget for fiscal year 2026.

He is calling for the spending increase to be supported in part by a 6% increase to the real property tax rate and a 0.1% increase to the income tax rate. Fiscal year 2027 begins July 1.

The council, which has until June 1 to finalize the county’s spending plan for the next fiscal year, began its review of Elrich’s proposed operating budget during its weekly business meeting Tuesday.

During the meeting, several members criticized Elrich’s proposed tax rate increases, as well as his plan to use $191.1 million from the county’s reserves to cover expenses in fiscal year 2027. Councilmember Sidney Katz (Dist. 3) called it “the worst budget” he’s ever seen.

Council policy

The council’s policy on reserves says the county’s total combined reserves each fiscal year should be at least 10% of the prior fiscal year’s adjusted governmental revenues. The total combined reserves include money in the county’s revenue stabilization fund and its unrestricted general fund balance.

Elrich’s proposal calls for a 10.6% reserve rate — higher than required, but lower than the 11.2% reserve rate in the adopted fiscal year 2026 budget.

The county’s contribution to the revenue stabilization fund would increase from $715 million in fiscal year 2026 to $736 million in fiscal year 2027, while the county’s contribution to the unrestricted general fund would decrease from $70 million to $46 million. The total contribution would fall from $785 million to $782 million.

“It really scares me,” Councilmember Kate Stewart (D-Dist. 4) said of Elrich’s plan. She said reserves should be set aside for emergencies, such as when the federal government shut down last fall. The council, then under Stewart’s leadership, responded with a $7.75 million spending package to support impacted residents.

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“What is being proposed right now ties our hands on that,” Stewart said during Tuesday’s meeting.

Councilmember Dawn Luedtke (D-Dist. 7) agreed, saying the county needs to prepare for situations outside of its control, including decisions made by the Trump administration.

“We won’t be able to plug every hole left by the federal government — and we’re not trying — but we are trying to do what we can when we can,” Luedtke said.

“If we leave ourselves no ability to do that, we’re just leaving everybody hanging,” she continued. “And that is because of a failure of choices to be responsible, be prudent, tighten the belt and do the things we need to do right here, right now.”

Elrich responds

During his media briefing Wednesday, Elrich said he agrees the county should not rely on reserves to fund its annual operating budget.

However, he said, the council has repeatedly chosen to go that route rather than adopt the income and property tax rates he says are necessary to continue providing services to residents. The council has also declined to consider his other proposals to generate revenue, including his proposed special taxing districts, he said.

“To look at this and now use Trump as an excuse not to address the needs of the community is really bothersome,” Elrich said. “But this is their budget now.”

The fiscal year 2027 budget proposal is Elrich’s last before his term as county executive expires in December. He cannot seek re-election this year due to term limits. A Democrat, he is instead seeking his party’s nomination for one of four at-large council seats in the June 23 primary.

Eight members of the 11-member council must vote to pass the county operating budget. Only six members are needed to pass the proposed property tax increase, but council President Natali Fani-González (D-Dist. 6) has said she will strive to get “as many councilmembers as possible to reach consensus” on the issue.

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Originally published at Bethesdamagazine