Montgomery County Council weighs retroactive income tax increase as FY26 budget gap widens

The Montgomery County Council continued its work session on the FY26 operating budget on May 5, reviewing committee recommendations and a county-executive proposal to raise the local income tax rate from 3.2% to 3.3%.

Council staff said the committees have placed $6,000,000 in reductions and $45,800,000 in additions on a reconciliation list and that the committee-recommended resource changes would produce a net decrease of $41,500,000 in available resources to fund the FY26 operating budget.

"If the council were to accept all the resource changes and only the reductions recommended to date, it will need to find an additional $35,500,000 in reductions or additional resources to approve a balanced budget," council staff told members; accepting all committee reductions and additions would require an additional $81,300,000, the staff summary said.

Why it matters: The council rejected the county executive's proposed property tax increase in committee and is now considering the executive's alternative — a proposal to raise the county…