Kent County lays out FY26 budget increases, earmarks $13.3 million for capital projects

Kent County on June 3 presented its proposed fiscal year 2026 budget, showing $3.3 million in additional revenue from the prior year and a plan to transfer $13,255,000 into the county capital projects fund while using $4,000,000 of fund balance to cover one-time expenditures.

Pat, a county budget presenter, told the Board of County Commissioners that overall revenues for FY26 are $3,300,000 higher than FY25 (a 5.1% increase) and that property taxes remain the county’s largest revenue source at about 56% of total revenues. "The assessable base after credits increased about 5% over last year's budget," Pat said, explaining most of the property tax revenue increase. Pat also said the county will increase the local income tax rate from 3.2% to 3.3% beginning calendar year 2026 and that water and sewer rates will increase 4% in FY26.

The nut graf: the proposed budget balances modest recurring growth against substantial one-time capital needs. County staff said recurring unrestricted expenditures will rise by just under $5 million, nonrecurring restricted expenditures by about $11.9 million, and total expenditures by about $16.9 million; the budget includes a large capital transfer and uses fund balance to smooth nonrecurring costs.

Key details presented to the commissioners included:

- Fund balance and transfers: Expected beginning FY26 fund balance just under $23,000,000; $4,000,000 of that to be used for FY26 nonrecurring expenditures and $13,255,000 to be transferred to the capital projects fund, leaving a projected unassigned fund balance near $5,700,000 (about 7.8% of budgeted expenditures). Pat said the 7.8% level is 0.3% above the county’s target of 7.5%.

- Revenue drivers: Property taxes are the largest revenue source (56%); income taxes are 32% and reflect the state increase of the maximum allowable rate to 3.3%. Pat said projected increases include $2,200,000 in property taxes and $755,000 in income taxes compared with FY25.

- Personnel and benefits: The budget includes a 5% salary increase for county employees, two new emergency medical technician positions, and removal of five positions (four public safety positions and one public works position). Benefit costs are rising substantially, with county health insurance up about 14% and pension costs increasing about 11%.

- Schools and mandated costs: The county’s recurring unrestricted largest single expenditure remains public schools at $21,500,000; public school funding increases by a little over $1,100,000, which Pat said includes a required minimum local effort of $816,000 and an additional $301,000 above the required level. Pat warned that state-mandated programs such as the education “blueprint” and other legislative changes will increasingly demand county resources in coming years.

- Capital and nonrecurring spending: The nonrecurring side totals roughly $18,900,000. The largest nonrecurring item is the $13,255,000 transfer to the capital projects fund; of that sum $255,000 is earmarked for the middle school project tied to the income tax increase and $13,000,000 is reserved for future capital projects. Other nonrecurring allocations listed included $2,345,000 for education capital (Kent County Middle School), $243,000 for public works bridge repairs and Millington wastewater site work, and $38,000 for program open space at county parks. The county also listed $1,946,000 in capital expenditures (equipment, paving, HVAC, library roof work and courthouse landscaping) and about $238,000 in public safety capital expenditures tied largely to the new EMS facility.

Public comment and next steps: The commissioners opened the meeting for public comment and received remarks from Herb Kane, executive director of Upper Shore Aging, and Mary McComas, superintendent of Kent County Public Schools, both thanking the county for budget support. The public hearing was formally closed by motion; the commissioners voted to accept written comments through Friday, June 6, and a motion to close the hearing carried unanimously.

The board also approved several consent items during the same meeting (minutes, grant applications and purchases listed on the agenda) and noted that written comments from Chesapeake College’s president were submitted and will be part of the record.

Ending: County staff and commissioners emphasized that FY27 will be particularly challenging, given recurring state-mandated costs and capital needs detailed in the county’s five-year capital plan, which lists roughly $82,000,000 in future projects including the middle school, public safety infrastructure and courthouse renovations.