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Committee recommends FY26–31 tax‑supported fiscal plan summary to full council after cautioning on revenue risk
Summary
The committee recommended the six‑year tax‑supported fiscal plan summary to the full Montgomery County Council. Staff highlighted a 3.5% average revenue growth assumption, an estimated 11.2% reserve level for FY26 and slower agency growth after FY26; council members warned the outlook is vulnerable to federal and regional shocks.
The Government Operations & Fiscal Policy Committee voted to recommend the FY26–31 tax‑supported fiscal plan summary to the full Montgomery County Council after staff outlined key assumptions and members raised concerns about downside revenue risk.
Mr. Smith, who presented the plan, said it is a six‑year snapshot required by charter and will be updated twice over the next 12 months: in December with new revenue projections and again in March with the executive’s recommended FY27 operating budget. "The plan is a snapshot in time," Smith said, noting the document reflects the council’s tax actions and does not factor potential federal‑policy impacts.
Staff highlighted several figures: an annual average revenue growth rate of about 3.5% over the six‑year window; agency expenditures rising about 7.3% in FY26 with much smaller growth in subsequent years (FY27 agency growth shown at roughly 1%); projected reserves of about 11.2% for FY26; and roughly $61.6 million available for agencies in FY27 based on current assumptions.
Councilmember Friesen praised staff work but warned the committee that growth in later years is muted and the county is exposed to federal and regional economic shocks. "This plan is sobering," Friesen said, noting the risk that out‑year projections could be revised downward and that the county faces difficult choices if revenues decline. Councilmember Katz also raised a clerical issue, pointing out a date typo in the packet that listed an approval date as May 22, 2026, rather than 2025; staff acknowledged the error.
Dennis Hetman of the Department of Finance told the committee revenue estimates are modeled conservatively and that May income‑tax distributions came in slightly better than projected; staff will continue to update forecasts as new distributions and external economic data arrive.
After the discussion the committee agreed to recommend the plan to full council for approval. The chair closed the meeting and adjourned the Government Operations & Fiscal Policy Committee.
