County budget office reports FY25 surplus, flags reliance on income tax and future risks

Carroll County’s Department of Management and Budget told the Board of Commissioners on Sept. 25 that fiscal year 2025 closed with revenues about $34 million higher than budgeted plus other adjustments that produced roughly a $51.4 million positive variance before the board’s FY26 commitments.

“Revenues will be, are about $34,000,000 in excess of what we budgeted,” budget chief Ted (surname not stated) told the commissioners. He also reported a contingency reserve and other unexpected inflows that together approached $51.4 million, but he cautioned the board that the bulk of that amount was committed during the FY26 budgeting process and should not be assumed as ongoing revenue.

The presentation described several revenue drivers and uncertainties. Property tax receipts exceeded forecasts by about $5.4 million (roughly 2 percent), with gains split between real‑property collections and railroad/public‑utility assessments. Income tax collections were $18 million above budget — part of a multi‑year pattern of variability for the county — but the presenter warned that much of the growth was in “minor distributions” and reconciliations rather than core payments, complicating future projections.

“I don’t want to lose that in 1 of those 5 years we came in actually under budget,” the budget presenter said, urging caution in relying on the most recent surplus as a template for long‑term planning.

The county also reported strong—but still not fully explained—gains in recordation and investment income, and the presenter said staff will examine whether those gains reflect durable changes in the local market. On the expenditure side, some departments underspent (public works was about $6 million under budget in part because of open positions and lower fuel costs). The presentation also noted that about $4 million in EMS expenditures were moved into a special revenue fund tied to EMS billing once collections and estimates became clearer.

The comptroller will present a finalized audited financial position when the audit is complete, the presenter said, and the budget office will return to the board in coming months with updated multiyear revenue projections and capital/operating recommendations for FY27 and beyond.

The presenter listed a number of potential fiscal risks: reductions or redirection of federal grants; changes to state funding or mandates; possible shifts in federal disaster response funding; liabilities tied to environmental cleanup (PFAS) and airport projects dependent on federal grants; increasing reliance on volatile income tax receipts; growing infrastructure renewal needs; landfill and solid‑waste capital needs; and other long‑term cost pressures. The presenter reminded the board that the county’s new 5 percent reserve provides a cushion but is not a permanent solution to structural gaps.

Commissioners asked questions about developer contributions to infrastructure and request handling; the board directed staff to schedule a work session on Developer Rights and Responsibilities Agreements (DARA) and infrastructure cost sharing.