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Baltimore County lays out FY26 budget constraints, cites state and federal uncertainty
Summary
County Executive Cathy Klausmeier and Budget Director Kevin Reed presented an overview of the proposed FY26 budget framework at a District 5 town hall, warning that state transfers, federal changes and rising fixed costs will constrain spending for next year.
County Executive Cathy Klausmeier and Kevin Reed, director of the Office of Budget and Finance, outlined the county’s budget framework and the constraints shaping the fiscal year 2026 spending plan at a March town hall in Perry Hall.
Klausmeier said the administration will present a balanced budget while noting “looming cuts at the state level and a new federal administration” that create uncertainty for county revenues. Reed detailed the county’s two-part budgeting structure and the specific pressures on both operating and capital plans.
Reed said Baltimore County’s operating budget is roughly $4,600,000,000 and identified income and property taxes as the largest revenue sources. He told attendees roughly half of every dollar goes to the school system, community college, libraries, pensions and debt service. He also highlighted $161,000,000 in American Rescue Plan funds that have been fully obligated and warned that federal reimbursement timing affects county program funding.
The presentation noted the county follows the County Council’s spending affordability guidelines; for FY25 the committee allowed a 4.36% growth rate, about $118,000,000. Reed also cited state actions that could shift costs to counties, estimating Baltimore County’s share of teacher pension and reassessment-related costs at $17,000,000 to $20,000,000.
On the capital side, Reed described a five‑year outlay where nearly half the revenue is water and sewer user fees and about 40% comes from general obligation bonds. He said construction costs have risen roughly 20% and the county is near its borrowing limits under current debt policies.
Klausmeier said the administration will work with department directors and the County Council to produce a balanced budget. She reminded residents the County Executive will submit the budget message on April 11 and that the council will hold public hearings in April and May before adopting a budget in May.
The town hall concluded with an invitation for written priorities to be emailed to townhall@baltimorecountymd.gov.
Ending: The county framed FY26 as a year of constrained choices: officials pledged to preserve services where possible while preparing to adjust to state and federal changes that could reduce net revenue.
