Thanks to $229.7 million in tax revenues above what Montgomery County had anticipated during Fiscal Year 2023, the financial outlook appears bright.
“Obviously, this is good news,” said Council President Andrew Friedson. However, he added, there is a great deal of financial uncertainty ahead.
Tuesday’s annual December budget update to council came before Montgomery County Public Schools’ budget has been released and state funding revealed.
County officials warned Tuesday morning during a Montgomery County Council session, there is plenty of reason for caution. The additional income from taxes above what was budgeted is a one-time thing and therefore should not be used for new programs or any items that require yearly funding, they noted.
A possible slow down or recession, predicted for 2023, could occur in 2024, officials pointed out.
Also, a recent announcement from the state about transportation cuts, including money for Ride On, could require increased transportation funding by the county.
On Thursday, Montgomery County Public Schools Superintendent Dr. Monifa McKnight is expected to announce the district’s proposed budget, which the council expects to be even higher than its last year’s budget. Higher needs from MCPS forced the council to raise taxes during 2023.
Councilmember Will Jawando said he expected MCPS’s ask to be about $150 million above last year’s request, especially because the council did not cover all the school district’s asks although the county did raise taxes more than 4% for schools.
“We created a problem for ourselves” by not raising taxes higher to cover MCPS’ needs, Jawando said.
Councilmember Natali Fani-González responded, “I think we need to be proactive in telling MCPS we can’t have another tax increase.” She pointed to residents who “are struggling to make ends meet at home.”
Fani-González said she plans to attend MCPS’s budget meeting to make that message clear.
During 2024, the county expects costs for fuel, utilities, overtime pay for firefighters and rescue services and transportation to increase. Also anticipated is the need to beef up funding for working families below the poverty line as federal programs, like SNAP, have decreased.
Together, those increases could amount to $85 million.
Councilmember Marilyn Balcombe said “another shoe to drop” could be requests by the commercial industry for financial assistance as a result of so many vacant buildings.
According to the county, projected tax revenues are expected to increase by 2.7 % in Fiscal Year 2025; 2.8% in Fiscal year 2026 and 2.6% in Fiscal Year 2027.
