OMB, non-departmental budgets show increases for new functions and debt service; committee presses on reserves and long-range outlook

The Office of Management and Budget and the Non‑Departmental budget presentations at the May 1 Government Operations and Fiscal Policy Committee hearing outlined proposed FY26 spending increases to support new functions and rising debt-service costs while using portions of the county’s unassigned fund balance for one‑time needs.

OMB reported a proposed FY26 budget of about $4.7 million, a 14.1% increase over FY25. The office said increases include a new budget-management analyst position to implement an indirect cost-rate pilot and funding for a previously unfunded budget-management position required by CB‑18‑2024 (which directs OMB to submit fiscal impact statements for council legislation). OMB also noted it expects to request a $300,000 supplemental to cover FY25 salary enhancements previously budgeted elsewhere.

The Non‑Departmental (Non‑D) general fund budget was presented at roughly $455.8 million for FY26, a $15.1 million increase over FY25. Non‑D includes debt service, grants and transfers, operational expenditures, alternative construction financing (notably $42.6 million for school construction on behalf of the Board of Education), economic development allocations, speed-camera program operating costs and the youth employment program (projected at about $101 million across programs). Presenters highlighted changes in debt-service forecasts tied to the 2025 bond sale and noted an ongoing review of the county’s debt-policy limit (8% of county-source revenues) because long‑term projections show the metric approaching the policy threshold in the late 2020s.

Committee members asked about potential bond-rating impacts tied to broader regional downgrades. County staff said rating-agency outreach is underway ahead of rating actions later in May and described steps to preserve reserves, manage debt issuance and work with the Office of Finance to reduce risk. Finance staff said the county’s projected general-fund operating reserve was being maintained in FY26 at a higher policy level (a 5% operating reserve was noted for FY26 compared with lower targets in prior years) and that current projections suggest the county remains within acceptable reserve targets, though FY27 and FY28 budgets will require careful attention because of potential revenue softness and state shifts in pension funding responsibilities.

Members also raised housing-market indicators and foreclosures. Staff said housing inventory has increased and that foreclosure-related information is being gathered for the council; officials cautioned FY27 may be more difficult than FY26 and emphasized the need to weigh long‑term choices about service levels and revenue options.

The committee did not take action on the budget during the session; staff said additional briefings and follow-ups will be scheduled as the council and administration prepare final budget adoption.