In straw vote, divided County Council supports progressive income tax structure
By
Ceoli JacobyMay 8, 2026 12:01 p.m.
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The Montgomery County Council appears inclined to adopt a progressive income tax structure for next fiscal year, forgoing revenue it plans to offset by eliminating a $692 tax credit against some homeowners’ property tax bills.
In a 6-5 straw vote on Friday, Council President Natali Fani-González (D-Dist. 6), Vice President Marilyn Balcombe (D-Dist. 2) and Councilmembers Sidney Katz (D-Dist. 3), Kate Stewart (D-Dist. 4), Dawn Luedtke (D-Dist. 7) and Shebra Evans (D-At-large) supported a proposal to raise the income tax rate for those making more than $150,001 annually.
The straw vote comes as the council continues to tinker with County Executive Marc Elrich’s proposed operating budget for fiscal year 2027, which councilmembers have broadly criticized for its reliance on tax increases and use of reserves to fund expenses.
Currently, the county has a uniform income tax rate of 3.2%. Elrich (D) in March proposed increasing the rate to 3.3% — the maximum allowed under state law. Elrich also proposed a 6% increase to the property tax rate, which most councilmembers have now indicated they will not support.
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The proposal supported by a majority of the council on Friday is a variation on the alternative budget framework Fani-González put forward last month.
“When I put forward the idea of the progressive income tax structure after we had talked about it for so many years, I think this year was the right year to do it,” Fani-González said on Friday. “Our duty should be making sure that we’re helping the most vulnerable.”
The council has until June 1 to take final action on the capital and operating budgets for fiscal year 2027, which begins July 1.
Tax structure details
Under the proposal supported by a majority of the council on Friday, the county income tax rate for people making more than $150,001 annually would increase to 3.3%. The income tax rate would decrease for anyone making less.
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Those making up to $50,000 annually would see their income tax rate decrease from 3.2% to 2.7% under the proposal supported by the council majority on Friday. Those making between $50,001 and $150,000 would see their income tax rate decrease from 3.2% to 3%.
By adopting the progressive income tax structure, the county would be forgoing $56.5 million in potential revenue. The council majority is seeking to offset that loss by eliminating the Income Tax Offset Credit (ITOC) for one year, which would save $139.7 million.
The ITOC is a $692 property tax credit for homeowners who claim their home as their principal residence. It used to be automatically applied to qualifying county property tax bills, but homeowners now have to fill out a one-time application to receive it.
Elrich has spoken out on multiple occasions against the proposed elimination of the ITOC, which he says will result in most homeowners paying more than they would under his proposal to raise the property tax rate.
Supporters of the proposed elimination of the ITOC emphasize that the credit does not benefit everyone, including people who qualify but may not be aware of it.
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“Unfortunately, it doesn’t provide the credit equally to everyone,” Balcombe said on Friday. “Renters don’t get this credit, it is owner-occupied eligible only.”
Decision not final
Councilmembers Andrew Friedson (D-Dist. 1), Kristin Mink (D-Dist. 5), Evan Glass, Will Jawando and Laurie-Anne Sayles (all D-At-large) voted against the proposed progressive income tax structure and related elimination of the ITOC.
Friedson, Glass and Jawando are all seeking the Democratic nomination for county executive in the June 23 primary. Elrich is term-limited and is seeking the Democratic nomination for one of four at-large seats instead of re-election.
Friedson said that while he appreciated his colleagues’ work in developing the proposed progressive income tax structure, he still could not support it.
“I’ve said from the outset that I wouldn’t vote for any tax increases. I haven’t wavered in that view,” Friedson said.
Jawando, who previously put forward his own progressive income tax proposal that would have increased the rate to 3.3% for those making over $500,000 per year, said he also could not support the council majority’s approach.
“I am not comfortable with raising the tax rate on people making $150,000 a year,” Jawando said.
Mink said she is searching for an alternative tax structure that would generate more revenue to fund Montgomery County Public Schools’ $3.79 billion operating budget request for fiscal year 2027.
“I think I need to be transparent that there is a limit at which I’m not gonna be able to vote for a budget that does what I feel is too deep a level of real devastation to our public schools,” Mink said.
She said she is specifically considering an option that would eliminate the ITOC without implementing a progressive income tax structure.
“There is an understanding not just amongst us but with the public that … often the straw votes might as well be the final vote,” Mink said. “This is not one of those.”
Glass agreed that there was more discussion to be had.
“Underscoring this conversation is that this is an extremely difficult budget to maneuver,” Glass said. “We will not have finality until next week.”
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Originally published at Bethesdamagazine