Caroline County administrator introduces fiscal 2026 budget, proposes 2¢ real estate tax increase and higher school transfer

Caroline County’s proposed fiscal 2026 general fund budget, introduced May 13, includes a 2¢ increase to the real estate tax rate and a higher local transfer for the school division, county officials said.

County staff described the introduced general fund budget as approximately $75.9 million and said the proposed real estate rate would move from the equalized rate of $0.50 to $0.52 per $100 of assessed value. The proposed tax-rate action was advertised earlier and the county’s budget schedule includes a public hearing May 27 and final adoption at the June 10 meeting after the required seven-day waiting period.

Nut graf: Why it matters

The budget proposal funds operating needs, school transfers and several new positions while limiting one-time draws on the county’s unrestricted fund balance. County officials said increases in employee benefits, retirement and health insurance are central drivers of the spending plan. The proposed real estate rate change is expected to generate roughly $1.1 million in additional annual revenue (staff estimate) and the administrator also proposed an increase in local school operating support to about $18.0 million — roughly $1.27 million more than FY25.

Key elements of the proposed FY26 plan

- Real estate tax: proposed increase of 2¢ (from 50¢ to 52¢ per $100 assessed value). County staff estimated roughly $1.1 million in additional revenue from the change plus new construction assessed value. - General fund introduced budget: $75,879,421 (advertised). - School operating transfer: proposed $18,000,936 in local funds (about $1.27 million increase over FY25 contribution); total school-related transfers and debt service approach $24.9 million in combined county support. - New personnel requests: county administrator proposed several additions, including one full-time sheriff’s sergeant (court deputy converted from part time), one full-time building inspector, one full-time HR generalist (moving from part time), and four full-time utility positions to support the growth in utility customers (those are budgeted in the utility fund, not the general fund). - Compensation: the proposed package includes a mix of cost-of-living/scale adjustments and step increases: a 3% increase for constitutional officers and social services, 4% for employees not on the county pay plan, and a proposed 2% scale adjustment plus step increases for employees on the county plans subject to satisfactory performance. - Fund balance and transfers: staff proposed $1,464,702 in one-time transfers from the unrestricted general fund balance for capital purchases while keeping ongoing transfers limited (staff emphasized avoiding general-fund transfers to utilities where possible to protect the county’s bond profile).

School funding and state dollars

The administrator said the proposed local transfer is about $151,491 above the state-required local-effort calculation, and it was presented to allow capacity for about 35 additional students above the state-planned ADM. The introduced county budget reduces the school board’s original request by approximately $1.7 million; school officials will adjust their internal category allocations once the board has appropriated local funds.

What the board did

The board received the budget presentation, set the advertised public hearing for May 27 and noted that legal requirements prevent adoption at the same meeting; final adoption was set for the board’s June 10 meeting. Supervisors asked staff to continue providing analysis and to meet with school staff during the budget-review process.

What officials said

County Administrator (presenting) said the proposed budget accounts for rising VRS (retirement) and health insurance costs and attempts to limit recurring transfers from fund balance while maintaining capital needs and school support.

Next steps

The county will hold the advertised public hearing on May 27 and may schedule follow-up work sessions before the June 10 adoption vote. Residents were directed to the county budget documents for line-item detail and to the June adoption schedule.