County projects $153.9 million in undesignated revenue for FY26, flags $2.2M pipeline estimate as provisional

Montgomery County officials presented preliminary revenue estimates for fiscal year 2026 on Feb. 10, showing an estimated $153.9 million in undesignated revenue and total projected revenue growth of $7.7 million.

Director of Management and Budget Mark McGruder told the Board the county expects $5.1 million in projected new revenue growth for FY26 on top of $2.6 million of additional base revenue already collected in FY25, producing the $7.7 million total increase. A notable item in the projection is $2.2 million from personal‑property assessments tied to the Mountain Valley Pipeline, added to the county’s public service corporation revenues.

McGruder said the FY25 actual revenues are outpacing budget estimates by about $3.3 million, of which roughly $2.6 million can be carried forward as base growth into FY26. He described the components used in the estimates: known real‑estate book values, known construction, the 2024 personal property book, and a conservative 3% sales‑tax growth assumption.

Why it matters: the undesignated revenue total underpins the county’s ability to fund schools, public safety and county operations without new restrictions. McGruder noted that national economic indicators remain positive and that local revenue categories (real estate, personal property and sales/use tax) continue to drive county receipts.

Board members raised caveats. Several supervisors urged caution about relying on the Mountain Valley Pipeline figure because the State Corporation Commission ultimately determines the pipeline assessment and the county will not receive official personal‑property values until the fall. Supervisor King said the commission “could lower this” and urged the Board not to budget the full amount before receipts are certain. Vice Chair Fidzikowski suggested holding a portion of the $2.2 million in reserve rather than treating it as fully available for recurring commitments.

McGruder also summarized FY25 trends driving revenue above estimates: unusually large additions to business personal property (including remodels at major retailers and additional value from FedEx and United Therapeutics), a change in the depreciation schedule used by the commissioner of the revenue for business personal property, increased interest earnings and about $300,000 in additional real‑estate tax collections from new construction.

Board members asked about downside risks: McGruder said a significant drop in local commercial values would typically show up only during a reassessment year (not in the near term), and that sales tax growth in the county was being conservatively estimated at 3%.

Outlook and next steps: staff said the county will continue to refine estimates and that the State Corporation Commission’s assessment for the pipeline will drive final receipts. McGruder emphasized that the $2.2 million pipeline figure is based on information provided by the pipeline’s consultants and will be “trued up” when the commission issues assessments later in the year.

Clarifying details: projected FY26 undesignated revenue $153.9 million; total projected new growth $5.1 million; FY25 actuals exceeding estimates by about $3.3 million (of which $2.6 million is retained base); Mountain Valley Pipeline estimate $2.2 million (provisional).