In a straw vote Friday in Rockville, nine members of the 11-member Montgomery County Council approved a $7.9 billion operating budget for next fiscal year that supporters say will provide tax relief for most county residents while providing additional money for public schools. 

The council-approved budget for fiscal year 2027, which begins July 1, includes a $143 million year-over-year spending increase for Montgomery County Public Schools (MCPS). 

But that amount is still $36 million short of what the district requested from the county — meaning hundreds of educator positions could be eliminated as the Board of Education works to balance the MCPS budget in the weeks ahead.  

The budget approved by the council on Friday does not include the 6.3-cent property tax rate increase recommended by County Executive Marc Elrich (D) to fully fund schools next fiscal year.  

It does include a progressive income tax plan to raise the local income tax rate from 3.2% to 3.3% for filers making $150,001 or more annually and lower the income tax rate for everyone making less. Elrich had proposed a uniform 0.1% income tax rate hike for all filers regardless of yearly earnings. 

Those who voted to approve the budget included 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), Kristin Mink (D-Dist. 5), and Evan Glass, Shebra Evans, Will Jawando and Laurie-Anne Sayles (all D-At-large).   

Councilmembers Andrew Friedson (D-Dist. 1) and Dawn Luedtke (D-Dist. 7) voted against the budget. 

Though the property tax rate will remain the same in fiscal year 2027, some homeowners will still have a higher property tax bill next year due to the council majority’s decision to eliminate a $692 tax credit available to filers who claim their home as their principal residence.  

Eliminating the property tax credit, called the Income Tax Offset Credit (ITOC), freed up money to support the progressive income tax plan. The plan was part of the alternative budget framework put forward last month by the council president once it became clear that most councilmembers would not support any property tax hikes. 

“I did introduce the progressive income taxing structure, and I did it as one of the first things I did as council president because it’s the right thing to do,” Fani-González said before the council’s vote on Friday. “Those who are making less money should be paying less income tax and I don’t regret that.” 

In a statement after the council’s straw vote on Friday, Elrich said although he was “criticized relentlessly” over his plan to raise property and income tax rates, the council’s plan also results in higher property tax revenues by eliminating the ITOC. 

“The Council approach is regressive, hitting homeowners with lower value homes harder, putting the entire burden on homeowners and leaving commercial property owners untouched,” Elrich said in the statement.  

State law does not allow counties to set different tax rates for commercial and residential properties. The state does allow counties to implement progressive income tax rates, but the tax rate for the highest earners cannot exceed 3.3%. 

Infrastructure dollars reallocated

The budget approved Friday was the culmination of months of deliberation over tax rates and funding levels for public schools and other core government functions. Without Elrich’s proposed tax increases, the council had an $189 million gap to fill. 

In her comments before Friday’s straw vote, Mink said the budget the council planned to bring to a vote on Thursday morning would have reduced the school district’s requested operating budget by $73 million. 

“As you saw yesterday, when it came down to that high-pressure moment, we had the votes needed to block that budget on behalf of MCPS, and we are back today having cut that in half,” Mink said, referring to the council’s last-minute decision to postpone the straw vote that was originally scheduled for Thursday afternoon. 

“We don’t know for sure which jobs we didn’t save” Mink said. “But as a former teacher and a current MCPS parent, I know that it doesn’t matter how excellent a teacher is, you need a much broader support system in order for our kids to access their full potential.”

Jawando on Friday suggested taking $36 million from the county’s $6.3 billion six-year capital improvements program (CIP) and giving it to MCPS for operating expenses, funding two $18 million tranches that would have otherwise been slashed.  

Jawando’s motion to reallocate the infrastructure funds passed 7-4, with Jawando, Fani‑González, Balcombe, Katz, Mink, Evans and Sayles in favor. Glass, Friedson, Stewart and Luedtke opposed the motion. 

‘No good options’

In making his motion to reallocate money from the capital to the operating spending plan for MCPS, Jawando said he was cognizant of the fact that there were “no good options.” 

“There are worse options, and among them would be the devastating, catastrophic cuts to MCPS staff and educators,” Jawando said. 

Jawando added that he tried to convince his council colleagues to approve a higher bond limit for the next six fiscal years, which would have allowed the county to borrow more money for capital projects, but a majority of them voted not to do so. 

“When we wait till the end like this, we’re in a difficult situation and we have to make difficult choices,” Jawando said.  

Stewart said one of the hardest parts of this year’s budget process for her was listening to MCPS parents and employees speak about mold, asbestos and other issues in their school buildings. Because of those needs, she said, she could not support Jawando’s motion. 

“I’m very concerned about what we’re doing with this action and what it means, not just for the near term, and what we can fund for infrastructure, but what it does for us long term,” Stewart said. 

In his comments before the vote on Jawando’s motion, Glass emphasized that “no agency and no department in Montgomery County is getting fully funded this budget.” 

However, Glass said, “I am just a little disappointed that the kids and the educators in New Hampshire Estates and a number of other facilities will not get the help that they desperately asked for.” 

Budget process 

Speaking after Friday’s vote, Friedson said he appreciated that the budget approved by his council colleagues increases spending on schools and fully funds contracts negotiated by the county’s public safety professionals and other public employees.  

However, he said, “it still contains tax increases and balloons the structural deficit to nearly $300 million that isn’t affordable for county taxpayers or for county government.” 

Friedson, Glass and Jawando are among the candidates seeking the Democratic nomination for county executive in the June 23 primary election. Balcombe, Stewart, Mink, Fani-González, Luedtke and Sayles all are seeking re-election to their seats this year.  

In her comments after Friday’s vote, Luedtke raised questions about transparency in the final days of the council’s budget deliberations. She said she was prepared to vote on a budget Thursday that was reflective of “public votes on the dais.” 

“Yesterday, literally as we were ready to vote, suddenly that transparent process was replaced by indecision, behind closed doors deal-making and major last-minute changes that exacerbate our structural deficit,” Luedtke said. 

Katz, who is wrapping up his third and final consecutive term on the council, also took issue with the way some of his colleagues approached the work of balancing the county budget this year. 

“I believe it must be noted that in order to get to eight votes, things have been agreed to that, in my opinion, are very poor business decisions,” Katz said. “It concerns me that this budget has become a vehicle for no compromise, but for a way that someone can do something, so they can send another press release.” 

Friday’s straw vote was not binding, though the council is unlikely to make any further changes to the fiscal year 2027 budget package. 

A final vote will be held on May 21.