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County staff warn state’s FY26 budget poses cost shifts to Montgomery County
Summary
County staff briefed the council on the state FY26 budget outlook: capital projects fared relatively well, but a statewide $3 billion cash shortfall and proposed cost shifts could transfer roughly $42 million of responsibility to counties including Montgomery.
Montgomery County staff told the County Council on Oct. 12 that while the state capital budget included several county priorities, the operating budget faces a roughly $3 billion shortfall that could create cost shifts to local governments.
Staff described the capital budget as a relatively positive item for the county, citing projects the county prioritized that received funding and noting one priority not previously preauthorized: Glen Echo. The presenter said the governor’s capital proposal includes funds the General Assembly typically directs — about $50 million in discretionary capital spending — and that county officials will work with the delegation to pursue additional county requests.
On operating budgets, staff said the state faces an “unprecedented” situation: roughly a $26 billion baseline budget and about a $3 billion cash problem in the near term. The presenter said the governor’s tax package to address the gap is roughly $3 billion, split about $1 billion in new revenues and about $2 billion in transfers from other funds, cost shifts and reductions.
Staff estimated county‑level impacts from proposed changes and cost shifts embedded in state aid at roughly $42 million for Montgomery County under the governor’s submitted budget, though they stressed the figure is a preliminary order‑of‑magnitude that may change during negotiations with the General Assembly.
Council members had no immediate questions during the briefing and the meeting moved to local bills.
