Baltimore finance director transmits $4.6 billion preliminary FY26 budget; officials flag targeted fee increases to close $85 million gap

Finance Director Laura Larson formally transmitted Baltimore’s preliminary fiscal 2026 spending plan to the Board of Estimates on April 2, a $4.6 billion budget that she said will be balanced through a mix of expense reductions and targeted revenue changes.

The budget “represents a $4,600,000,000 spending plan that’s comprised of a $3,600,000,000 operating budget,” Laura Larson said as she opened the Board’s nonroutine session, and she told members the proposed plan reflects an $85,000,000 shortfall created by expenditures outpacing revenue growth.

Larson said the proposed general fund is about $2.6 billion — roughly $256 million more than the current year — and that the plan funds 9,921 city positions, 66 more than in FY25. She told the Board the shortfall was driven by rising personnel and benefit costs, expected higher debt service tied to planned borrowing, and inflationary increases across agency budgets.

Why it matters: Baltimore’s preliminary plan sets the size and priorities that the Board of Estimates will review and the City Council will consider this spring. If enacted with changes, it will set tax-supported spending levels and staffing for the coming fiscal year and influence how the city responds to state and federal budget actions that Larson said remain uncertain.

Larson outlined how the plan proposes to close the $85 million gap: roughly $26.6 million in new revenue initiatives paired with deeper expense savings. On revenue, she said the city is pursuing a targeted package of fee and fine updates rather than broad-based tax increases. “We’re assuming about $26,600,000 worth of new revenue initiatives and that includes … $6,500,000 that would be generated from updating different fee structures and fine structures,” Larson told the Board.

Larson and other speakers repeatedly emphasized that recommendations will be targeted and phased. She said staff will complete a comprehensive city fee study this summer and return specific fee recommendations to the Board, with a goal of bringing proposals back early in the fall.

Selected fee proposals discussed in the hearing include: a proposal to move landfill tipping fees to a “full cost recovery model” and raise the fee to $135 per ton, which Larson said the administration expects would generate about $8.9 million and would primarily affect large private haulers; and a proposed 20% increase to the city’s EMS transport fee, targeted mainly at non-Medicaid and non-Medicare payers. Larson said the city is not proposing changes to the small-hauler program that serves household or small-contractor customers.

Larson said grant-funded spending is also a significant budget component: the preliminary plan reflects about $344.4 million in state and federal awards in FY26, a decline of about $16.7 million from FY25 driven in part by more cautious, award-based grant budgeting. She listed the five largest federal grant programs included in the forecast: Community Development Block Grant, Ryan White, Head Start, Continuum of Care, and Workforce Innovation and Opportunity Act funding, and told the Board some discretionary EPA awards have already been canceled.

Budget priorities: Larson walked the Board through the administration’s five pillars for FY26 spending and highlighted major investments: $624.8 million for youth initiatives (including funding from the Children & Youth Fund to create about 8,500 summer youth work slots and $850,000 to continue a healthy-babies program that can leverage Medicaid match); roughly $1.1 billion for public safety (with civilianization of additional police teams and $5.2 million from the opioid restitution fund for EMS enhancements); $1 billion for cleaner and healthier communities (including $5.2 million for temporary solid waste crews and plans to reduce route sizes); $346.4 million for equitable neighborhood development (including permitting reforms and zoning office changes); and $219.2 million for stewardship of city resources (with moves to convert some contract positions to permanent staff and a $300,000 allocation to complete a citywide equity assessment).

Mayor Brandon Scott pushed back on the notion of broad-based tax increases and defended targeted enforcement fees. “I have no sympathy for someone who’s illegally dumping,” the mayor said. “If they don’t wanna pay a higher fine in the city, don’t illegally dump.” He also emphasized the administration’s intent to protect core services while making targeted revenue changes.

Comptroller Bill Henry and other Board members praised the presentation and signaled they will examine the fee proposals carefully. Several Board members urged sensitivity to residents who face rising utility and living costs; Larson said the administration is intentionally avoiding a blanket increase in fines and fees and will seek Board approval for any fee changes that require legislative action.

Process and next steps: Larson told the Board the administration will give a more detailed presentation to the Board of Estimates on April 23 and hold a taxpayer night the same day; the Board will vote on the FY26 budget in May, and the City Council will introduce the ordinance later in May and hold agency hearings and its taxpayer night ahead of the June adoption deadline. She reminded the Board that the materials associated with the preliminary budget — including a resident’s guide — are available on the city’s budget website.

Discussion vs. decision: The Board “noted” the transmission of the preliminary FY26 ordinance of estimates at the meeting; no final adoption occurred. The budget remains a proposal that the Board and City Council will amend and vote on in the weeks ahead.

Clarifying details

- Total preliminary budget: $4.6 billion; operating budget about $3.6 billion; year-over-year increase about $478 million (11.3%). Source: Laura Larson presentation.

- General fund: $2.6 billion, $256 million higher than FY25; 9,921 positions authorized (66 more than FY25).

- Shortfall and balancing: $85 million shortfall; administration assumes $26.6 million in new revenue initiatives paired with expense savings; $6.5 million of the new revenue is expected from fines and fee changes.

- Fee/fine breakdown (as presented by Larson): roughly $2.0 million from adjusting various fine structures; about $4.5 million from updating city fees; a targeted landfill tipping fee increase to $135/ton (projected $8.9 million, largely paid by large haulers); a proposed 20% increase to EMS transport fees (targeted at non-Medicaid/non-Medicare payers).

- Grants: $344.4 million in state and federal awards in preliminary budget; down $16.7 million vs. FY25; five largest grants named: Community Development Block Grant, Ryan White, Head Start, Continuum of Care, WIOA. The administration said no large formula-based grant cancellations have been received but some discretionary EPA grants were canceled.

Speakers

- Laura Larson, Budget Director, Baltimore City Department of Finance (government). First referenced: 00:14:11, transcript presentation of FY26 preliminary budget.

- Brandon Scott, Mayor (government). First referenced in budget discussion at roughly 00:36:17.

- Bill Henry, Comptroller (government). First referenced as board member asking questions at roughly 00:23:20.

- C. Cohen, Board President (government). First referenced in opening remarks and abstention list earlier in the agenda.

Authorities

- grant: Community Development Block Grant — referenced by Laura Larson when describing large federal grant programs.

- grant: Ryan White Program — referenced in federal grant list.

- grant: Head Start Program — referenced in federal grant list.

- program: Continuum of Care — referenced in federal grant list.

- statute/program: Workforce Innovation and Opportunity Act — referenced in federal grant list.

- policy/financial: American Rescue Plan Act (ARPA) — referenced as prior funding source for some positions being transitioned to general fund.

- federal recovery: Federal Emergency Management Agency (FEMA) reimbursements — referenced as a source that reimbursed some shelter-related general funds (related context but referenced in other items during the meeting).

Actions

- {"kind":"other","identifiers":{"agenda_item_id":"SB2510907"},"motion":"Note transmission of the proposed fiscal year 2026 ordinance of estimates (preliminary budget)","mover":"not specified","second":"not specified","vote_record":[],"tally":{},"outcome":"noted","notes":"Board noted transmission of the FY26 preliminary budget; detailed review and votes scheduled for later April–June 2025."}

Discussion_decision

- Discussion points: causes of an $85M shortfall; packaging of $26.6M in new revenue with $2 for each $1 in savings; targeted fines and fee updates rather than broad tax increases; planned landfill tipping fee and EMS transport fee adjustments; grant uncertainty and conservative grant budgeting.

- Directions: staff to complete a comprehensive city fee study this summer and bring back specific fee recommendations for Board approval; administration to return for a detailed Cabinet presentation at a special Board session April 23 and to hold taxpayer night that evening.

- Decisions: Board formally “noted” transmission of the preliminary FY26 budget (no adoption; additional Board and Council action required).

Clarifying_details_array

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proper_names

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community_relevance

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meeting_context

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searchable_tags:["budget","FY26","fees","landfill","EMS","Laura Larson","Mayor Brandon Scott","Board of Estimates","Baltimore"]

provenance:{"transcript_segments":[{"block_id":"transcript-block-0001","local_start":0,"local_end":210,"evidence_excerpt":"The first item on the non routine agenda is SB2510907 from the Department of Finance. This request is to note the transmission of the proposed fiscal year 20 26 ordinance of estimates, otherwise known as the city's budget.","reason_code":"topicintro"},{"block_id":"transcript-block-0002","local_start":6700,"local_end":6725,"evidence_excerpt":"Seeing no further questions, I will note this item for the board. Thank you Director Larson. ... This item is noted by the board.","reason_code":"topicfinish"}]}

salience

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engagement_forecast

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graph_signals

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