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Council staff warn of steep revenue declines beginning FY2027; members press executive for a plan
Summary
Staff presented a mid‑year fiscal update showing modest change for FY2026 but projecting more than $100 million in lower revenues for FY2027 compared with June projections, driven by declines in property and income tax estimates; councilmembers pressed the executive branch for concrete guidance and contingency planning.
Council staff delivered a mid‑year review of Montgomery County’s six‑year fiscal plan, telling members that fiscal 2026 is largely on track but that the outlook deteriorates starting in FY2027.
Council staff summarized the updated revenue forecast and said total revenues were projected to decline by “more than $100,000,000 in fiscal ’27 when compared to June 2025,” with property tax and income tax assumptions accounting for the majority of the downward revision. Staff warned the cumulative impact across the plan could exceed $850 million if current projections hold.
Jennifer Bryant, director of the Office of Management and Budget, and finance staff described ongoing monitoring of state and federal developments that could alter the outlook. Finance staff said the county’s increase in working families’ tax credit uptake added positive revenue clarity (roughly 3,000 more claimants than assumed), but that appeals, assessment timing and delayed federal economic data (partly due to a government shutdown) were adding uncertainty.
Several councilmembers pressed for a formal executive plan to prioritize services and to provide clearer guidance to departments and stakeholders. Councilmember Andrew Friedson urged clear directives, saying the council had been asking for a plan and that ad hoc supplementals have been filling gaps. Councilmember Kate Stewart and others asked whether state aid assumptions had been revised; Bryant said the administration was monitoring the state Board of Revenue Estimates and would update the council as information arrives.
Why it mattered: The updated fiscal picture sets the frame for the FY27 budget. Council staff recommended caution about using reserves to balance recurring agency uses because that approach would create larger structural deficits later.
What’s next: The county executive will prepare the FY27 recommended budget in March; council staff and executive offices will continue monitoring state and federal developments and provide further analysis and guidance to the council and departments.
