Politics and Policy

County Revenue and Budget

Latest update.

Issue: The 2022 Budget: The County Executive’s proposed budget for FY2022 recommended no tax-rate increases, includes a reorganization of the county’s police department, and targets funding to support recovery from the pandemic. Some Councilmembers have expressed concerns over the reliance on federal funding, which they feel in uncertain in the future.

Earlier updates:

  • The Council will hold public hearings on the budget, which must be passed by June 1.
  • 04/15/2021:See Bethesda Beat article about Councilmembers’ concern over the reliance of the county budget on future federal funding
  • See summary report on the proposed budget in Bethesda Beat
  • The recently passed federal aid bill will provide the county with over $200M in operating budget funds; county municipalities will receive an additional combined total of over $100M. See details in this Seventh State blog posting.
  • County Council unanimously adopted a proposal by Councilmember Friedson to create a Revenue Estimating Group to help it in reviewing the Executive’s proposed budget.
  • In January the County was projected to have a sizable budget deficit for FY2021, which ends in June. See the staff report here.
  • The County staff report on affordability guidelines for 2022 is here

Issue-Revenue:  How can the county increase revenues over the longer term so it can meet its budget requirements while balancing concerns for the environment, transportation, and schools.

Background: For several years, the county has been experiencing low economic growth because of the lack of job creation and a low rate of establishment of new businesses in the private sector in comparison to nearby counties and other jurisdictions. 

Two 2020 council initiatives aimed at improving the county’s long term economic condition were passed recently over the County Executive’s veto.

  • Council Bill 29-20 as passed offers 15-year property tax breaks on Metro development projects in the hope that this will spur high rise development activity near Metro stations. 
  • The Council modified and then accepted the County Planning Board’s updated Subdivision Staging Policy, now referred to as Growth and Infrastructure Policy.  See this website for details. This policy requires the government to evaluate public infrastructure capacities, such as schools and roads, to determine whether they are sufficient to support a proposed development project before approving that project.  According to some, the changes to the policy reflect more of an emphasis on growth rather than on balancing the infrastructure to support new development. 

information added 05/31/2021

State Revenue and Budget Outlook – FY2022 and Beyond

Issue: What is the outlook for the state budget in FY2022 and beyond

Latest Update:

  • 09/30/2021: Maryland is ending the fiscal year with a $2.5 billion balance in its state budget, largely attributable to a windfall in tax revenue, according to state analysts. Maryland in April passed a record $52.4 billion budget that sent cash payments to the poor, and gave bonuses to state workers and tax breaks to small businesses. State analysts say the recent financial bump has been driven in large part by gains in tax revenue. Even in a year when 14 percent of employed residents lost their jobs and unemployment claims flooded the state’s system, personal income tax and sales tax revenue increased 9 percent and 7 percent, respectively. Wealthier taxpayers experienced “robust growth” in their capital income — in line with general gains in the U.S. stock market — and wage growth broadly exceeded expectations in the first six months of 2021, analysts said.

State Legislative Actions – 2021

The 2021 session of the General Assembly concluded on April 12. Major legislation, described in other sections of Current Issues [see the Latest Updates in each section], dealt with school funding, changes in police practices and accountability, and the environment.

The legislature’s Department of Legislative Services has issued its summary report of the 2021 session.

For a list of the major legislation vetoed by the Governor, see this link from Maryland Matters.

For a complete list of the legislation vetoed by the Governor, see this link.

updated 10/04/2021

Archived but Important

2020 Ballot Questions

Both the State and the County had important constitutional and charter questions on the 2020 ballot.

State Ballot Questions

Background:  In November 2020 Maryland voters approved two state ballot questions: 1]  A constitutional amendment that authorizes the General Assembly, beginning in FY2024, to increase, diminish, or add items to the budget as long as it does not exceed the proposed budget submitted by the governor; and 2] A referendum to approve the expansion of commercial gaming in the State of Maryland to authorize sports and events betting for the primary purpose of raising revenue for education.

More Information:  See the PRA Fall 2020 newsletter.

County Ballot Questions

Background:  In November 2020 Montgomery County voters approved two county ballot questions:  1] To remove a cap that limits how much the county’s property tax revenue can increase in a single year. Requires all nine council members to approve an increase in the tax rate; and 2] To expand the council from nine seats to 11 seats. Seven members would be elected by district. The other four seats would remain at large.

More Information: See the PRA Fall 2020 newsletter.

updated 01/05/2021