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Montgomery County unveils funding plan to cover nearly all MCPS FY26 request
Summary
County leaders announced a collaborative funding plan that would provide Montgomery County Public Schools (MCPS) with 99.8% of its FY2026 budget request by using one-time draws from a retiree health benefit trust and a larger county contribution; the plan will be considered by the full County Council later this week.
Montgomery County Council President Kate Stewart announced a collaborative funding plan on behalf of the county and the Montgomery County Board of Education that would provide Montgomery County Public Schools (MCPS) with 99.8% of its fiscal 2026 funding request while avoiding an immediate countywide income tax increase.
The funding proposal, described at a joint press event with Board of Education President Julie Yang and MCPS Superintendent Thomas Taylor, would use one-time resources — including an increased drawdown from the retirement health benefit trust — alongside a larger county contribution to bridge a budget gap while the county and school system pursue longer-term solutions.
“This year … has been a very difficult budget year,” Council President Kate Stewart said. She said the plan would let the county pass a budget without raising the county income tax and would “provide MCPS with 99.8% of the FY ’26 funding requested by the Board of Education.”
The officials gave the following numerical summary during the event: the board’s supplemental request for FY2026 totaled $268 million; the county said it could fund $210 million of that request and proposed a $50 million bridge using one-time funds. That accounting left an $8 million shortfall, which Stewart attributed in part to a pension funding shift from the state to local governments. Stewart also said the move would support a system with a total budget “of more than $3.6 billion” and with roughly $2.4 billion coming from the county.
“It's never a good time to use one-time funds for an ongoing expense unless it is a genuine emergency,” said MCPS Superintendent Thomas Taylor, describing the county’s approach as buying time for the school system to “evaluate, to plan, and to restructure for long term sustainability.” He said association partners also helped close the current gap.
Board President Julie Yang framed the funding decision as values-based. “Funding our school system is never just a budget decision. It's a value decision,” Yang said, thanking the council for “courage, collaboration, and creativity.”
Stewart and other officials clarified this was an announced plan, not a final appropriation. The council president said the full County Council will take up the plan later this week. Stewart also noted there is a separate pending resolution from the county executive to raise the county income tax from 3.2% to 3.3%; the council scheduled a public hearing later the same day and a vote on that resolution the following day.
Speakers at the event emphasized the limits of the approach and the work that remains. Taylor said the one-time bridge gives the school system time to address solvency and long-term benefits funding but acknowledged the solution is “far from perfect.” Press questions at the event sought additional detail about future costs to taxpayers; Stewart and Taylor said future revenue options and benefit-plan reforms will be part of ongoing council and school-system discussions.
No formal motion or vote on the county funding plan was recorded at the press event. Officials described the announcement as a collaborative proposal to be considered in upcoming council proceedings.
Next steps: the County Council will consider the plan later this week, the council will hold a public hearing on a separate income tax resolution later the same day, and a council vote on that resolution is scheduled for the following day.
