County budget officer says recurring revenue outlook for FY26 is stable but flags state aid risk

Chris Trumbauer, Anne Arundel County budget officer, told the Anne Arundel County Board of Education on Jan. 8 that the county’s fiscal foundation is “stable” for recurring revenue in fiscal 2026 but cautioned the board that several one-time revenue sources and potential state funding cuts limit new spending.

Trumbauer said the county closed fiscal 2024 ahead of its conservative forecast, producing about $19.1 million of additional fund balance beyond what had been anticipated. He attributed most of the year-over-year surplus to higher-than-expected income-tax reconciliations and elevated investment income, but stressed those gains are largely nonrecurring. “That's not gonna last forever, so we don't budget for that,” Trumbauer said.

The budget officer walked the board through the revenue mix for the county and emphasized that roughly three-quarters of the county’s revenue comes from property and income taxes. He said recordation and transfer tax revenue—tied to real-estate activity—remains depressed compared with the prior peak and that a typical recovery would depend on mortgage interest rates falling.

Trumbauer also described policy limits on property tax revenue: the county applies an annual revenue cap that allows overall property-tax revenue to grow by either 4.5% or the January Consumer Price Index, whichever is less. He noted the county executive in past years exercised legal authority to exceed the cap to increase funding for schools, a step permitted under state law.

While projecting modest growth for income tax and stable property-tax receipts, Trumbauer advised the board to watch two risks closely: possible reductions in state assistance because of Maryland’s projected structural deficit, and changes in the federal workforce that could affect locally concentrated federal payroll. He added that rising built-in costs—debt service, pensions and health insurance tied to prior pay packages and capital projects—will consume much of the revenue growth the county does realize.

The budget officer closed by reminding the board that public budget town halls will begin the following night and that no final decisions have been made by the county executive and council: those hearings are the public’s opportunity to weigh in on revenue priorities before the county finalizes its budget.

Ending: Trumbauer answered brief board questions and remained available after the presentation. The board received the revenue outlook as part of budget preparations for the superintendent’s FY26 request.