Queen Anne's County forecasts 8.8% revenue growth with new tax management system

In the heart of Queen Anne's County, Maryland, the atmosphere buzzed with anticipation as local officials gathered for the annual budget hearing on May 20, 2025. The meeting, a crucial event for the community, unveiled the county's financial roadmap for the upcoming fiscal year, highlighting both challenges and opportunities.

The county's revenue projections for the next year are promising, with an expected growth of 12.74% in property and income tax revenues. This increase is largely attributed to a robust property tax assessment cycle, which has seen average increases exceeding 15%. However, the Homestead tax credit limits these increases for primary homeowners to 5% annually. Overall, the county anticipates a revenue total of $209.1 million, marking an 8.8% rise from the previous year.

A significant portion of this revenue—85.6%—comes from property and income taxes. The county is also introducing a new short-term rental tax and permit management system, projected to generate an additional $150,000 from accommodation taxes.

As the discussion shifted to expenditures, the Board of Education emerged as a focal point, receiving an additional $8.3 million. This funding includes $7.6 million above the maintenance of effort requirement and $644,000 to cover state cost shifts related to teacher retirement pensions. The county is grappling with state budget shortfalls, which have led to increased financial burdens on local governments.

In a strategic move, the county plans to maintain its workforce without adding new positions, a decision influenced by uncertainties at the federal and state levels. However, it will implement a cost-of-living increase for employees, reflecting current inflation rates, alongside a pay-for-performance program aimed at retention and recruitment.

Two significant reorganizations are on the table: merging the Bridal Control Division with the Bridal Services Division to streamline operations and creating separate departments for Housing and Family Services and Aging and Transportation. These changes are expected to yield approximately $200,000 in annual savings.

The budget hearing also addressed the pressing issue of educational funding. Despite the county's commitment to exceeding the maintenance of effort funding requirement—having done so four times in the past seven years—the state has fallen short in its financial obligations. Currently, Queen Anne's County is $2.2 million below the state funding plan for education, a gap that has accumulated to $9 million over the past five years.

As the meeting concluded, it was clear that Queen Anne's County is navigating a complex financial landscape, balancing the need for educational funding with the realities of state budget constraints. The decisions made in this budget hearing will shape the community's future, reflecting both the challenges they face and their commitment to supporting local education and services.