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Montgomery County council approves straw vote for progressive income tax, removes homeowner offset for FY27
Summary
Council members voted a straw adoption of the Government Operations committee’s proposal — amended by Vice President Miriam Balcon — to replace a flat 3.2% county income tax with a three‑bracket progressive schedule starting Jan. 1, 2027, and to set the Income Tax Offset Credit to $0, a change staff says would generate one‑time resources for capital projects but would reduce long‑term revenue.
The Montgomery County Council on May 8 took a straw vote to advance a progressive county income tax structure for calendar-year 2027 and approved, as amended, the Government Operations committee recommendation to set the Income Tax Offset Credit (ITOC) to $0.
Council Vice President Miriam Balcon moved the amendment, changing the two lower brackets from the GO committee’s recommendation: the 0–$50,000 band would be taxed at 2.7% (up from 2.5%), and the $50,001–$150,000 band at 3.0% (up from 2.8%); the top band (over $150,000) remains 3.3%. Chair Keith Stewart presented the GO committee recommendation to reject the executive’s flat 3.3% income tax increase and instead adopt a progressive structure beginning Jan. 1, 2027.
Finance staff member Smith told the council the county’s current flat rate is 3.2% and that state law constrains counties to a 2.25% minimum and 3.3% maximum. Smith said the GO committee’s bracketed plan would reduce FY27 revenue compared with the executive’s proposal but that eliminating the ITOC would produce roughly $50 million in one‑time savings in FY27 to help balance the budget and fund capital projects.
“We rejected the executive’s recommended income tax rate of 3.3% on all taxable income starting on 01/01/2027,” Chair Stewart said when summarizing the committee’s recommendation. Smith later described distributional effects and a multi‑year phase‑in: the GO committee’s original proposal produced a projected net reduction of about $64.9 million in FY27 versus the executive’s plan and an estimated $183.2 million reduction by FY29; Balcon’s amendment narrowed the FY27 gap by roughly $27.4 million.
Supporters argued the progressive structure lowers taxes for the majority of filers and can be more equitable than a single flat increase. Vice President Balcon said the amendment “keeps the proposed progressive tax structure in place” while improving the county’s near‑term fiscal position. Several council members — including Will Giordano and Chevra Evans — said they supported Balcon’s amendment because it brings more revenue in the first year while still retaining progressivity.
Opponents warned about consequences for school funding and households near the $150,000 threshold. Council Member Kristin Mink said she would not vote for the package as a final budget, citing concerns that the revenue in the proposal still would not be sufficient for Montgomery County Public Schools and urged more options be explored. Council Member Andrew Friedson and others also said they were uncomfortable raising rates on families earning around $150,000.
The council conducted a hand (straw) vote and the chair declared the amended GO committee recommendation approved; members emphasized the result is a straw vote and can be revisited before any final resolutions are drafted. Council Member Mink successfully moved to schedule additional council time next week to consider alternate revenue scenarios and to allow members to revisit the income tax/ITOC package if needed.
What happens next: staff will prepare resolutions based on the council’s straw votes for formal consideration later in the week; council members may offer amendments before any final binding votes. The GO committee’s recommendation as amended is the starting point for drafting the FY27 income tax resolution.
