City budget director outlines FY26 plan: $4.6 billion total, new fees and expanded capital investments
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Summary
City Budget Director Laura Larson told the Budget and Appropriations Committee the recommended FY26 spending plan totals about $4.6 billion, with an 11 percent increase in the general fund, proposed fee changes to raise revenue, expanded capital investment and a focus on quality‑of‑life services.
City Budget Director Laura Larson presented the administration’s recommended fiscal 2026 spending plan to the Baltimore City Council Budget and Appropriations Committee, saying the proposed ordinance of estimates would total roughly $4.6 billion with a $3.6 billion operating budget and a $931.9 million capital program.
"The city was faced with an $85,000,000 projected shortfall as we began our work on the fiscal 26 budget," Larson said, describing drivers such as rising wages and benefits, debt service and fleet and building costs. She said the administration approached balancing the budget by focusing on recurring initiatives, cost optimization, and investments in core quality‑of‑life services.
Larson said the general fund recommendation totals about $2.6 billion (an $256 million, or 11 percent, increase over FY25) and that the mayor’s plan pairs revenue increases with identified savings: for every dollar of new revenue there are roughly $2 of identified savings. She outlined revenue proposals including an updated tipping fee for the landfill (last raised in 1993), an assumed 20 percent increase in EMS transport billing revenue, and a citywide fee inventory that could yield roughly $6.5 million from adjusted fees and fines. Larson told the committee the administration was not proposing an increase to the local income tax rate and estimated a hypothetical increase to 3.3 percent would generate about $14 million to $40 million depending on structure and assumptions discussed in the hearing.
On expenditures, Larson highlighted $50.4 million in local support for city schools, increased pay‑as‑you‑go capital funding and a $5.2 million increase in the Department of Public Works (DPW) to reduce route sizes for trash and recycling crews that the administration said would add 15 new recurring crews. She said the budget includes $1.3 million for neighborhood safety and engagement to expand group violence reduction citywide and $1.2 million for additional staff at Housing and Community Development to support a vacancy initiative.
Larson also described the administration’s approach to federal and state grants (budgeted at $361.1 million) and said those figures are fluid because of pending federal proposals. She flagged the opioid restitution appropriation for FY26 — $36.7 million to grants, city services and oversight — and said the annual budget will incorporate additional opioid restitution allocations in subsequent years.
Committee members asked for more detail on affordability programs after water/wastewater/stormwater rate increases were included in the enterprise funds (water and wastewater rates up 9 percent each; stormwater up 3 percent). Larson agreed to provide historical utilization and FY26 appropriation details for the Water for All affordability program. Council members also pressed the administration to specify which fines and fees would generate the $6.5 million figure and to consider equity and distributional effects of fee increases; Larson said the fee inventory is being reviewed fee‑by‑fee with attention to who benefits and who is burdened.
Why this matters: the administration’s recommended budget increases recurring operating and capital commitments, ties additional revenue proposals to identified savings, and advances targeted public‑works and school investments. The council asked for line‑by‑line detail on fees, DPW staffing and the water affordability program ahead of statutory budget hearings.
