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County staff rebalance FY26 operating and capital budgets after state cost shifts; board sends draft to public hearing
Summary
County finance staff presented an updated FY26 budget that absorbs roughly $8 million in state policy shifts (income tax and pension changes) and balances by delaying hires, reducing capital transfers and travel, and redirecting some CIP funds to school operating needs; commissioners gave consensus to proceed to public hearings.
Washington County budget staff presented an updated FY26 operating and capital budget that reflects state policy changes estimated to reduce county revenues and increase school system costs by roughly $8 million.
Kelsey Mace, the county CFO, told commissioners changes included an estimated $3 million reduction in income tax revenue from state increases to the standard deduction, a roughly $2.4 million shift in teacher pension costs to the county for Washington County Public Schools and Hagerstown Community College, and an additional $2.1 million required for the Board of Education due to changes in the state’s foundation formula implementation.
To rebalance, staff reduced proposed personnel requests, deferred hiring for eight firefighters and one shift supervisor until Oct. 1, removed several proposed part‑time positions, reduced the proposed wage‑scale decompression (lowering average increases), cut travel and employee investment programs, and pulled back $3.9 million in transfers to the capital fund. The FY26 general fund was rebalanced at $323,115,430; the combined operating and capital proposal totals approximately $505 million with a 10‑year capital plan of $881 million.
Why it matters: The board must set tax rates and adopt a budget; changes in state policy created a significant near‑term budget pressure that staff addressed with a mix of spending reductions and timing changes. Commissioners asked questions about the increase in funding to the Board of Education (an approximately $13 million year‑over‑year increase in county funding for schools) and confirmed details for upcoming public hearings: rate/fee hearings May 6 and a budget public hearing May 13.
Ending: The commission gave consensus to move the proposed FY26 budget to public hearings; staff will publish materials and return with public hearing input before final adoption.
