The Commission on State Debt has recommended a State property tax rate of 11.2 cents per $100 of assessed value on real property and 28.0 cents per $100 of assessed value on operating real property of public utilities for fiscal 2026. These rates have remained unchanged since 2007.
As an advisory body to the Board of Public Works, the Commission meets annually to recommend property tax rates sufficient to cover the principal and interest payments on Maryland’s outstanding general obligation bonds — the State’s primary source for capital improvements like schools, facilities, and infrastructure.
Despite rising debt service costs, the Commission chose not to raise rates. The State projects $1.116 billion in property tax collections in fiscal 2026 — a 6.3% increase over the prior year — driven by higher assessments. That revenue still falls short of the $1.411 billion needed to cover debt service payments.
To close the gap, the State will draw $154.7 million from the general fund — and projections show that reliance will continue to grow. In fiscal 2027, the general fund share of debt service will rise to more than $390 million, followed by nearly $500 million in fiscal 2030, according to official projections.
The property tax recommendation now moves to the Board of Public Works — a three-member panel including Governor Wes Moore, Comptroller Brooke Lierman, and State Treasurer Dereck Davis — for final approval in the weeks ahead. The Board also reviews contracts and expenditures with broad impacts on county governments.
Bond rating agencies plan to issue updated credit evaluations before Maryland’s next bond sale in June.
Stay tuned to Conduit Street for more information
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