DLS briefing outlines state-aid allocations and cost shifts for Western Maryland counties

Analysts from the Maryland Department of Legislative Services (DLS) briefed the Western Maryland Legislative Delegation on state aid to local governments, presenting FY26 estimates and identifying several proposed state-to-local cost shifts that would affect county budgets.

Hiram, a DLS presenter, told the delegation that the figures in the report "already reflect the reductions that the governor has proposed" and then walked members through program-by-program allocations. The report shows statewide state aid to local governments at about $11,400,000,000 and provides jurisdiction-level estimates. Among Western Maryland jurisdictions the briefing cited approximate FY26 state-aid totals as: Allegany County about $163,000,000; Carroll County about $254,000,000; Frederick County about $500,000,000; Garrett County about $408,000,000; and Washington County about $327,000,000. DLS noted the vast majority of state aid goes to public school systems.

DLS explained key program details and recent changes: - Police Aid and Police Aid Enhancement: distributions are largely based on population density and violent crime for the enhancement component; Garrett County receives relatively low per-capita amounts under the enhancement program because reported violent-crime counts are low. - Fire and Rescue Aid: FY26 statewide funding rose from $15 million to $16.5 million and includes a minimum jurisdictional floor equal to 2% of the program that benefits smaller jurisdictions such as Garrett County. - Disparity Grant Program: provides extra funding to low-income jurisdictions. DLS said Allegany, Garrett and Washington counties qualified for disparity grants. Garrett’s allocation decreases in the briefing because its net taxable income collections increased for tax year 2023, reducing the program need under the formula. - Education funding: DLS showed per-pupil funding differences across counties, and explained that targeted student factors and local wealth per pupil drive distribution. DLS said Allegany County ranks highly on several targeted components while Frederick and Carroll receive less under concentration-of-poverty components.

DLS also highlighted proposed cost shifts outside the standard state aid formulas. The briefing said the budget proposals and reconciliation measures would reduce funding under current-law amounts by about $262,500,000 statewide and that roughly $143,000,000 of the changes would create new costs counties or other local governments would have to pick up (teacher and community college retirement contributions were cited as examples). DLS provided county-level examples: it estimated county government retirement cost shifts of roughly $750,000 in Allegany County, about $268,000 in Garrett County and about $2,500,000 in Washington County. DLS also said the governor proposed shifting a larger share of property reassessment costs to local governments (from 50% to 90% of costs), which it estimated would add roughly $370,000 for Allegany County, about $600,000 for Carroll County, roughly $261,000 for Garrett County, nearly $800,000 for Frederick County and over $500,000 for Washington County.

DLS analysts answered delegation questions on data accuracy and methodology. Hiram said most state-aid numbers are "formula driven, so they're to the dollar," and that multiple state agencies — the Maryland State Department of Education, the Department of Budget and Management and DLS — run simulation models to verify estimates. On property reassessments, DLS explained the State Department of Assessments and Taxation (SDAT) performs periodic reassessments on a three-year cycle and that local homestead caps apply only to owner-occupied residences (not second homes or commercial property), which affects how assessment increases phase in.

DLS offered printed copies of the report and related charts; staff said hard copies and a county revenue outlook report would be dropped off later that day and that digital copies are available on the General Assembly/DLS website. The delegation did not take formal action on the briefing; members asked follow-up questions and were offered one-on-one meetings with DLS staff.

The delegation then opened for public comment and, finding none, moved to adjourn.