Montgomery County will see revenues drop by $854 million if current fiscal projections hold true for the next six years.
Analysts with the Montgomery County Council said the root cause of this grim fiscal outlook stems from federal policies and their impacts on immigration, the federal workforce and tariffs.
That’s all according to Gene Smith, deputy director of Budget and Policy with the Montgomery County Council, who delivered the bad news during Tuesday’s council session.
While Smith said the picture for fiscal year 2026 is “on track,” he noted that the long-term outlook is “more concerning.”
Smith told the county council that in prior years, the revision estimates in December showed an increase in expected revenues: $225 million in fiscal year 2024 and $132 million in fiscal year 2025.
But looking ahead to fiscal year 2027, Smith said, “Total revenues are projected to decrease by more than $100 million when compared to June 2025.”
“The current fiscal plan projects that more than $850 million in resources will not be available to fund county services and programs” over the next six years, Smith added.
The “two culprits” responsible for the downward projections, he said, are expected drops in property and income taxes.
Smith emphasized the that the projections are a snapshot in time, “and as always, we will see a new version in March, with the county executive’s recommended budget, which will have new assumptions, new changes,” Smith said.
Smith was referring to the county’s budget timeline. Each March, the county executive releases his budget request which must be approved by the Montgomery County Council, which takes a final vote on the budget proposal in May.
Jennifer Bryant, director of the county’s Office of Management and Budget, told council members, that federal changes could have an impact the county’s funding.
“We, on the executive side, are of course watching the fiscal picture that is happening both at the state and the federal level,” said Bryant.
She added that another influential factor will be the Maryland General Assembly starting its legislative session in January with a $1.5 billion deficit.
County Council member Kate Stewart asked Bryant for any projections on how the county could be affected if the state’s budget pressures resulted in “cost-sharing to be pushed down to us” given the state’s deficit.
Bryant said her department has not made any updates to assumptions about state aid. Bryant noted that on Friday, the Maryland State Board of Revenue Estimates will present an update on the state’s fiscal outlook.
County Council President Natali Fani-González thanked the analysts for their presentations and said, “I’m just going to be very clear, I am very worried for fiscal year 2027.”
“I’m getting myself ready to take really painful decisions as we move forward,” she added.
Council member Andrew Friedson called the news “a sober dose of cold water.”
Looking ahead to a challenging budget season, Council member Dawn Luedtke said, “We have incredibly difficult work ahead of us.”
Council member Will Jawando insisted that the county’s most vulnerable residents should be protected as the county works to deal with tough budget choices in the coming year.
“We’re going to have to ask, I believe, our community members who have done well to do more to help us fill those holes,” Jawando said.
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