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MAKO tells Prince George’s County council state budget pressures, teacher-pension costs will squeeze local budgets
Summary
Maryland Association of Counties representatives warned the council of a worsening state structural shortfall and a shift that allocates larger teacher-pension costs to counties, urged smoothing disparity grants, and discussed housing, energy and microgrid policy implications for large counties like Prince George’s.
The council heard a briefing from the Maryland Association of Counties (MAKO). MC Keegan Air, MAKO president and a Frederick County council member, introduced the session; Michael Sanderson, MAKO executive director, reviewed the state fiscal picture and policy items that will affect county budgets.
Sanderson said the state faces a substantial structural shortfall that has grown since 2025 and that forecasts showed approximately a $1 billion gap earlier and a projected $2.5 billion shortfall for FY28. He said the governor and general assembly have taken actions to avoid immediate disruption but that counties are likely to see continuing pressure next year.
Of immediate consequence to local budgets, Sanderson said the state has allocated a larger share of increased teacher-pension costs back to counties (described in the briefing as roughly a 50/50 split), resulting in “an invoice” to counties that will increase local budget obligations. He described the disparity grant as volatile year-to-year and suggested smoothing its calculation to reduce sudden swings in local aid for jurisdictions like Prince George’s County.
The briefing also covered housing and energy policy. Sanderson said the state has recently enacted changes to streamline transit-oriented development and permitting, but that Maryland’s regulatory layers still make housing production slower and more expensive than in some peer states. On energy, MAKO staff warned of rising electricity costs driven by demand (data centers, AI) and of the limits of distribution infrastructure; they noted local options such as net-metering reforms, incentives for distributed generation, and microgrids as potential local strategies.
Council members pressed MAKO on regional coordination (including PJM and neighboring jurisdictions), tax options and microgrid planning; MAKO staff advised local flexibility and regional engagement while noting practical constraints such as multi-year timelines for new generation and infrastructure siting. The briefing was not a vote; it provided informational context ahead of county budget work.
