On February 27, Legislative Director Kevin Kinnally testified before the Appropriations Committee to support HB 352 – Budget Reconciliation and Financing Act of 2025 with amendments.
The Budget Reconciliation and Financing Act (BRFA) of 2025 and subsequent analyst recommendations shift more than a quarter of a billion dollars in new costs onto county governments. These provisions place an unprecedented burden on counties, forcing impossible trade-offs between tax increases and service cuts.
Make no mistake − this is a State-mandated property tax increase. With two-thirds of Marylanders living in counties already at the maximum 3.2% local income tax rate, these cost shifts leave counties with no flexibility to absorb the burden. The only option is to raise property taxes − hitting renters who see costs passed down and homeowners already struggling with rising assessments. Forcing counties into this position is not just fiscally reckless − it is regressive, unsustainable, and punitive.
MACo’s testimony on HB 352 raised concerns about significant cuts and cost shifts that would force counties to raise property taxes or cut essential services.
- Teacher Pension Cost Shift – Counties would absorb $186 million in pension liabilities for costs they don’t control.
- SDAT Cost Shift – Counties would pay 90 percent of SDAT’s budget ($21 million more) without oversight, threatening property tax fairness.
- Enterprise Zone Elimination – Strips $100 million over 10 years from Baltimore City alone, weakening local economic development across Maryland.
- Community College & Special Education Costs – Shifts $30 million onto counties for nonpublic placements and retirement costs.
- Disparity Grant Cuts – Reduces $12 million in aid to less affluent counties.
- Local Health & Program Open Space Cuts – Strips dedicated funding, increasing financial instability.
Counties are partners in funding essential services, but shifting the State’s budget shortfall onto local governments is not a solution — it forces property tax hikes, service cuts, or both — pushing the burden onto residents and businesses instead of addressing the structural budget issues.
MACo and county leaders are prepared to work with state policymakers on all these issues, and other considerations, as part of a responsible balanced budget plan. MACo hopes that state leaders recognize that burdens on county budgets are substantial, and these challenges would only be worsened by added cost shifts or disproportionate budget cutbacks on county programs.
HB 352’s cross-file, SB 321, was heard on February 28 in the Senate Budget and Taxation Committee. Kevin Kinnally testified in support of this bill with amendments.
More on MACo’s Advocacy:
