Taxes, raises, funds for schools: What to know about MoCo’s $8B budget proposal

April 7, 2026 5:05 p.m.

Montgomery County Executive Marc Elrich (D) presents his $8 billion operating budget proposal for fiscal year 2027 during a press conference at Rockville’s Richard Montgomery High School. The proposal now heads to the County Council for review. Credit: Ceoli Jacoby

Will property taxes increase? How much money will be spent on Montgomery County public schools next fiscal year? Are county employees getting a pay raise?

Residents who want to weigh in on County Executive Marc Elrich’s $8 billion operating budget proposal for fiscal year 2027, which begins July 1, can attend this week’s County Council hearings on the spending plan.

They are scheduled for 7 p.m. Tuesday and Wednesday and 1:30 p.m. Thursday. Those interested in testifying at the public hearings in person or virtually can sign up on the council’s webpage or by calling 240-777-7803. 

On Tuesday, the council began its review of Elrich’s proposal, which represents a $420 million — or 5.5% — increase over the county’s $7.6 billion operating budget for fiscal year 2026.

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Some members of the County Council have already expressed an unwillingness to pass the budget as proposed. During Tuesday’s meeting, Council President Natali Fani-González (D-Dist. 6) said her colleagues who say they won’t support any tax increases should “get ready to propose some cuts.”

“You cannot have it both ways,” she said.

The council has until June 1 to take action on the operating budget and capital spending plan for fiscal year 2027. Eight members of the 11-member council must vote to pass the budget package.

Here are five things to know about the proposed operating budget:

Montgomery County Public Schools (MCPS) would be fully funded — with a property tax rate increase

Under Elrich’s proposal, the county would fully fund MCPS’s requested operating budget of $3.78 million for fiscal year 2027 through a dedicated property tax rate increase.

The district’s request is $179.7 million above its current operating budget, with the increase driven in large part by staff salary increases and a goal of reducing elementary school class sizes by at least one student.

Elrich’s proposal calls for raising the commercial and residential property tax rate by 6.3 cents — from $1.026 to $1.089 — per $100 of assessed value.

If adopted, the rate increase would generate an additional $164.6 million in revenue for schools in the next fiscal year, according to county budget documents.

The last time the County Council changed the property tax rate was in fiscal year 2024, when it approved an increase of 4.7% with much of the additional revenue going toward schools. The property tax rate remained the same in fiscal years 2025 and 2026.

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County employees would get raises

The collective bargaining units representing county employees secured wage increases for their members that are reflected in Elrich’s proposed budget for fiscal year 2027.

Non-uniformed county government employees represented by UFCW Local 1994 MCGEO will receive a 2.85% general wage increase in fiscal year 2027.

Career firefighters represented by the International Association of Fire Fighters Local 1664 will receive a 2.5% increase. Officers represented by the Fraternal Order of Police Lodge 35 will receive a 3% increase.

Craig Howard, the council’s executive director, said during a Tuesday briefing at the council office building in Rockville that “the compensation component is the primary component of the increases across agencies” in the fiscal year 2027 operating budget.

Local income tax rate would hit state maximum

In addition to the property tax rate increase, Elrich’s budget calls for raising the county’s income tax rate by 0.1%, from 3.2% to 3.3%.

Elrich unsuccessfully proposed the same income tax rate increase, enabled by a 2025 state law change, for fiscal year 2026.

If approved, any change in the income tax rate would not take effect until Jan. 1 — halfway through fiscal year 2027. According to county documents, the increase to the income tax rate can be expected to generate an additional $68.8 million in revenue for fiscal year 2029, which would begin July 1, 2028.

Under Elrich’s proposal, the income tax rate would be the same for all county residents regardless of how much money they make. State law allows counties to set different income tax rates for different groups of earners, but Elrich did not exercise this option in his proposal for fiscal year 2027.

The recycling and resource management budget would support closure of the Dickerson incinerator

Elrich has proposed using the operating budget as a vehicle for shutting down the county’s Dickerson incinerator, otherwise known as the Resource Recovery Facility, and replacing it with a more sustainable advanced waste processing facility.

Under his proposal, annual solid waste disposal fees for a single-family home would increase from the current rate of about $388 to about $402 in fiscal year 2027. For a multi-family unit, the fee would increase from about $30 to about $33. For non-residential users, the fee would increase from about $1,090 to about $1,196.

County budget documents say Elrich’s recommended solid waste fees and expenditures are “aligned” with the policy decision to close the Dickerson incinerator. But Cindy Pena, a spokesperson for the county’s Environment Department, has said solid waste charges would increase for all payers regardless of whether the council supports the closure of the facility.

Fani-González has said she will not ask the council to make a decision about the facility’s closure until after the fiscal year 2027 budget has been adopted, though another councilmember could attemptto raise the issue sooner.

“I think the county executive has neglected to offer a real plan on how to close the incinerator, and to offer solutions that are based on our values — on equity, on environmental justice and so forth,” she told reporters during a March 23 media briefing.

Some expenditures meant to offset loss of federal money

During his public operating budget presentation last month, Elrich made clear that some expenditures are meant to offset an expected loss of federal funding for various social services in the next fiscal year.

Among other changes, Elrich proposes to increase the reimbursement rate for Montgomery Cares — a community-based health program for uninsured adults — from 45% to 52.5% of the total cost of care.

The county’s Department of Health and Human Services estimated in November that 23,000 county residents were at risk of losing health care coverage due to Medicaid eligibility changes at the federal level.

During his budget presentation last month, Elrich said the county could not afford to fully cover the cost of providing health care to uninsured residents. However, he said he is proposing the increase because the 45% reimbursement rate has put Montgomery Cares community providers in jeopardy.

“If they go away, there goes our first line of health care for people who have no health care,” Elrich said. The change in the reimbursement rate is expected to cost an additional $1,564,817 next fiscal year, according to county budget documents

Elrich is also proposing a 2.5% inflationary adjustment for funds provided to the county’s nonprofit partners, which have seen federal grants cancelled and reimbursements delayed under the Trump administration, as well as more funding for homeless services, which have also been targeted for cuts at the federal level.

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Originally published at Bethesdamagazine