Montgomery Council Unveils Plan to Fund 99.8% of School Budget Request Without Tax Hike

This week, the Montgomery County Council unveiled a proposal to fund 99.8% of Montgomery County Public Schools’ (MCPS) $3.65 billion budget request for fiscal 2026, without raising income or property tax rates.

The Council’s plan comes after County Executive Marc Elrich proposed a modest income tax increase from 3.2% to 3.3% as part of his $7.65 billion operating budget for fiscal 2026.

The plan, developed in partnership with MCPS, reallocates $50 million ($25 million in fiscal 2025 and 2026) from the County’s Retiree Health Benefit Trust. This funding source typically reserves money for health benefits for future retirees, but will now be partially redirected to address current budget needs.

Maintaining State Requirements and Local Investments

The agreement includes a $210 million contribution above the State’s maintenance of effort (MOE) requirement—the minimum per-pupil funding level counties in Maryland must meet.

MCPS Superintendent Thomas Taylor noted that the plan provides immediate relief but acknowledged the need for long-term planning. “We recognize that this is one-time funding, but this gives us important time to continue to evaluate, plan, and restructure for long-term sustainability,” Taylor said.

A Collaborative Approach to Education Funding

Council President Kate Stewart emphasized the Council’s deliberate decision to draw from the Retiree Health Benefit Trust, highlighting its usual role as a reserve for long-term obligations.

However, Stewart underscored that these are not “normal times,” pointing to rising costs and growing service demands. The plan represents a collective effort to prioritize education without burdening taxpayers.

The proposal is a testament to the Council’s willingness to collaborate with the Executive’s office and MCPS leadership to address funding challenges sustainably. Elrich’s initial tax proposal aimed to fund schools and other priorities fully, and the Council’s alternative seeks to achieve nearly the same outcome through a different method.

Next Steps

The Council will review the budget plan before holding a final vote in the coming weeks. If approved, the plan will fund 99.8% of the MCPS budget request, achieving near-full funding without raising taxes.

Visit the Montgomery County Council website for more information.