County releases revised FY26 operating and capital budgets after state shifts; commissioners authorize up to $37M in bonds

Washington County staff presented an updated fiscal year 2026 operating and capital budget that incorporates state legislative changes shifting roughly $8 million of costs onto the county, and the Board of County Commissioners gave consensus to advance the revised budget to public hearings. Separately, the board approved a bond‑authorization resolution to issue up to $37,025,000 in general obligation bonds to finance capital projects and, potentially, refund callable 2015 bonds.

Chief Financial Officer Kelsey Mace and budget staff described multiple state actions affecting county revenues and obligations. Key impacts included an estimated $3 million reduction in income‑tax revenue due to increased standard deductions in state law; an increased county share of property‑valuation administration costs (rising from 50% to 90% of certain costs), and state shifts requiring additional county contributions for teacher pension costs (about $2.2 million for Washington County Public Schools and $165,000 for Hagerstown Community College). Additional changes related to the state education foundation formula added roughly $2.1 million in required funding for the Board of Education, increasing the board of education appropriation by about $13 million compared with the FY25 appropriation.

To rebalance the budget, staff reduced planned personnel requests, delayed hiring for eight firefighter positions until October 1, 2025, eliminated certain new part‑time positions, scaled back planned wage‑scale decompression slightly, reduced travel and employee‑investment programs, and trimmed capital outlays and transfers to the capital fund. The proposed FY26 general fund budget was rebalanced to $323,115,430; total proposed operating funds are reported at about $394.2 million, with combined operating and capital at about $505 million.

Mace asked commissioners for consensus to take the revised budget to the public hearing process. The board agreed to schedule public hearings: utility and rate/fee hearings for May 6 (water quality, solid waste, airport) and a Tuesday evening public hearing on the budget on May 13 at 6 p.m. at the public safety training center.

On a separate agenda item, bond counsel presented a resolution authorizing the issuance of general obligation public improvement and refunding bonds in an amount not to exceed $37,025,000. The resolution gives staff flexibility to set final maturities and refund portions of the 2015 series that are callable July 1, 2025, if debt‑service savings can be achieved. The sale was scheduled for May 20 with a June 3 closing; the board adopted the resolution on the counsel’s recommendation.

Commissioners asked questions about sensitivities in the market and were told county counsel and the county’s financial adviser will monitor market conditions and may postpone a sale if conditions are unfavorable. The bond authorization passed on a recorded roll call vote (5‑0).