When state tax policy shifts, county leaders feel it. At MACo’s 2025 Summer Conference, Robert Sandlass, Treasurer of Harford County, and Chief Deputy Comptroller Andrew Schaufele broke down the complex but critical connection between Maryland’s income tax decisions and local government budgets.
Robert Sandlass portrayed how income taxes are the linchpin of county budgets. In Harford County, they represent 45% of the general fund but this source of revenue can be unpredictable. Using decades of budget data, Sandlass showed how actual revenues routinely diverge from forecasts. “We know these estimates are wrong, we just don’t know by how much,” he noted, citing the inherent uncertainty in income tax distribution.
Sandlass walked through how quarterly distributions work, why reconciliation payments can cause big year-to-year swings, and how external forces, from federal spending changes to economic shifts and even artificial intelligence, add noise to revenue streams. Planning for schools, public safety, and infrastructure is far harder when the cash arrives late or in uneven bursts.
Andrew Schaufele zoomed out to explain how Maryland’s income tax system is tightly linked to the federal tax code. Because state and local taxes piggyback on federal adjusted gross income, even small federal tweaks can ripple through county budgets. A pending federal tax bill could reshape deductions and exemptions, no tax on tips or overtime, new senior deductions, and even a car loan interest break. Maryland law includes an automatic decoupling provision if federal changes hit state revenues too hard in a single year.
The session ended with a call to partnership. State and local officials may approach the issue from different angles, but they’re tied to the same coin, balancing service demands with the revenue tools available.
Title: Two Sides, Same Coin: Balancing State Policy and County Budgets
Speakers:
- Robert Sandlass, Treasurer, Harford County
- Andrew Schaufele, Chief Deputy Comptroller, Office of the Maryland Comptroller
Moderator: The Honorable Karen Lewis Young, MD State Senate
More About MACo’s Summer Conference:
