DLS: Harford County set to receive $434.2 million in state aid; budget proposals would shift costs to counties

The Maryland Department of Legislative Services told the Harford County delegation that Harford County will receive $434,200,000 in state aid in fiscal 2027, including $388.6 million in direct aid and $45.7 million toward retirement-payment contributions, a department presenter said.

The briefing, delivered by Arnold Aja of the Department of Legislative Services, laid out the county's major funding lines: the public school system receives the largest share (reported at about $347.1 million), Harford Community College about $20.1 million, county and municipal governments $13.2 million, the local health department $5.8 million and libraries $2.3 million.

Why it matters: DLS said total state aid for Harford County grows 3.7% over the prior year, above the statewide average of 3.2%. But the department flagged a 2.6% reduction to Harford's local health department tied to a recalibration of formula funding and last session's budget language limiting growth adjustments to the core formula.

"It remains unclear whether [the DBM COLA] will offset the reductions," Aja said, referring to Department of Budget and Management guidance that a cost-of-living increase was included in the budget but that county-level allocations had not yet been specified.

Education and colleges: DLS reported Harford County sees a 5.4% increase in per-pupil direct aid (above the 4.6% statewide average) and cited a proposed change in the governor's budget that revises the enrollment count for free and reduced-price meals. That change raises statewide school funding by an estimated $228.4 million but, according to DLS, would largely benefit Baltimore City, Prince George's and Montgomery counties rather than Harford.

DLS further noted a budget-reconciliation provision that would cap year-over-year community college formula increases at 3% (requiring General Assembly approval). If approved, DLS estimated that Harford Community College would receive about $609,000 less in FY2027 than under the uncapped formula (instead of a projected 6.3% increase).

Retirement cost shifts: One of the more consequential proposals described would make local governments responsible for 50% of the statewide increase in retirement contributions for teachers, librarians and community-college faculty, subject to legislative approval. DLS estimated Harford County government would be required to cover more than $1.6 million in additional retirement payments under that proposal.

Transportation and local highway funding: DLS warned that gasoline and motor vehicle revenue-account (GMVRA) distributions are set to revert toward fiscal-2024 shares beginning FY2028, reducing the statewide local share from 20% to 15.6% under current forecasts. On that basis, DLS estimated Harford County could lose about $1.8 million annually. DLS staff clarified that revenue enhancements enacted last year were directed to the Transportation Trust Fund and MDOT projects, not to the GMVRA local distributions.

Police-aid allocation: Delegates questioned a change in how police-aid enhancement funding was being allocated. DLS explained the administration maintained the prior year's allocations rather than recalculating with the latest uniform crime-report data; because Harford's violent-crime share decreased in calendar 2024, keeping the prior allocation resulted in Harford retaining roughly $77,000 it might otherwise have lost.

Delegation follow-up and resources: DLS staff pointed members to a Harford County local fiscal briefing and a suite of resources on the Maryland General Assembly/DLS website (two-year charts by program, session reports, school funding exhibits). Staff advised the delegation to coordinate with General Assembly budget committees and DBM as the budget moves through the process.

Questions and procedural note: Delegates asked clarifying questions about which jurisdictions would be affected by health-department formula changes, the mechanics of GMVRA distributions, and whether proposed shifts would increase county obligations for school- and library-related retirement payments. DLS repeatedly recommended working with DBM and legislative committees to clarify county-level COLA allocations.

The session closed after DLS completed its briefing; a motion to adjourn was made and seconded.