St. Mary's County adopts $348.6 million FY2026 budget; keeps tax rates flat, reduces energy tax to zero

St. Mary's County commissioners on May 20 approved the county's FY2026 operating and capital budgets, a set of fee and charge updates, and a revenue ordinance that sets tax rates and other revenues for the coming year.

The action, presented by Benetta Van Cleve, chief financial officer, adopted a $348,563,112 general-fund budget and tied appropriations that also include about $28.5 million in enterprise and special revenue funds and roughly $75.4 million for capital improvements. The board also approved a revenue ordinance that leaves most property tax rates unchanged, reduces the county energy and fuel tax from 0.3125% to 0.0% (a projected revenue reduction cited in the presentation of about $325,000), and raises two rescue tax rates to 0.03 for Leonardtown and Hollywood.

The commissioners also approved a slate of updated fees and charges. Staff highlighted a formulaic 2% increase in the annual environmental and solid-waste service fee, moving it from $102.48 to $104.53, and a set of smaller increases across recreation and parks program fees and facility maintenance charges. Van Cleve said changed fees were noted in bold in the public materials and asked commissioners to act on the package.

Why it matters: the package authorizes county spending for the fiscal year beginning July 1, 2025, sets the local revenue framework, and preserves a 15% fund-balance reserve target the county uses for fiscal stability. The energy-tax reduction and the decision to hold other tax rates steady were highlighted by commissioners during debate.

Budget highlights and process details: Van Cleve told the board the proposed revenues totaled about $336.4 million (a budget-to-budget increase of roughly 4%), with a $3 million budget-to-budget increase in other revenues driven principally by interest income. Use of fund balance will be required in the plan but the presentations said the county will maintain the 15% reserve. The appropriation ordinance and the full budget package were approved in separate motions, and the board also authorized required state certification paperwork for the Maryland State Department of Education.

Commissioner Mike Hewitt, representing the second commissioner district, acknowledged his dissent on a portion of the final package, saying the timing of late changes left some members surprised. "You win some, you lose some," Hewitt said, adding that he hoped the approved budget would meet community needs and be affordable.

Actions taken: the board approved the fees-and-charges schedule, executed the revenue ordinance that sets tax rates, approved the appropriation ordinance (identifying departmental appropriations and compensation for appointed employees), adopted the FY2026 budget as submitted, and authorized the president to execute budget certification forms required by the state. Several motions were passed unanimously; one motion to schedule a zoning hearing later in the meeting produced an abstention (see separate article on that item).

Implementation notes: staff said that some county fees are set by formula (for example, the solid-waste fee) and that the Rescue Squad tax-rate increases for Leonardtown and Hollywood had been reviewed at prior public hearings where Leonardtown received 16 supporting comments and Hollywood received eight. Van Cleve said deputy staff involved in bond and escrow work would follow up on required administrative steps.

Outlook: FY2026 begins July 1, 2025. The approved appropriation ordinance funds county departments, elected officials' budgets, and capital projects included in the capital improvements plan. Commissioners said they expect continued discussion with departmental leaders about implementation and monitoring of the approved spending plan.