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Department of Legislative Services briefs Montgomery County delegation on state aid and potential local cost shifts
Summary
DLS told the Montgomery County House Delegation that the governor’s budget shows roughly $400 million in state aid for the county and outlined proposed formula changes — including a revised free-and-reduced-meals count and a potential 50% shift of retirement increases to local governments — that could alter school, college and local budgets.
The Montgomery County House Delegation received a local fiscal briefing from the Maryland Department of Legislative Services on Jan. 30, where DLS officials outlined the county’s state-aid totals and proposed changes that could shift costs onto local governments.
Arnold Daja of the Department of Legislative Services told the delegation that the governor’s budget materials show Montgomery County receives about $400 million in total state aid and then walked delegates through sector-by-sector allocations and proposed policy changes. He said Montgomery College was listed at roughly $79,800,000, the county and municipalities about $70,000,000, the local health department about $63,000,000 and that the school system receives the largest share.
Why it matters: DLS cited three proposed policy changes with meaningful local effects. First, a revised enrollment count for students eligible for free and reduced-price meals would raise school funding statewide (DLS reported a statewide increase of about $228.4 million over statutory amounts). Second, provisions in the Budget Creation and Financing Act would impose caps beginning in fiscal 2027 and require General Assembly approval, which DLS said could reduce funding available to some institutions. Third, DLS said the state proposes shifting 50% of the statewide increase in retirement payments for teachers, librarians and community college faculty to local governments, pending legislative approval, which would raise local pension-related costs.
DLS officials identified specific local impacts during the briefing: they said the proposed caps and formula changes would reduce Montgomery College funding by about $3.1 million and cited a 7.3% change referenced for K–8 formula funding under certain scenarios. The briefing also presented year-over-year changes (DLS reported about a $17.1 million overall net change and a roughly $3.0 million decrease for the public school system tied to the completion of a one-time pedestrian and bicycle improvement project).
On retirement costs, DLS said the state applied uniform percentage reductions across counties and gave example figures of about 3.4% for public schools, about 3.7% for community colleges and about 0.7% for libraries. DLS noted Montgomery County is exempt from the library reduction because it participates in a separate county retirement plan rather than the state plan.
Public safety and transportation: the briefing covered police aid and transportation revenues. DLS described police-aid enhancement funding and said the fiscal 2027 allocations are largely unchanged except for an item involving Baltimore City. On transportation, DLS presented a roughly $24.0 million pool with suballocations to counties and municipalities and warned that restoring prior distribution rules beginning in fiscal 2028 could reduce statewide allocations by about $6.0 million in the forecast presented.
Follow-up and next steps: DLS said staff would take follow-up questions by email and that the delegation had three local bills on the agenda later in the session (the briefing did not include detailed debate or votes on those bills). The delegation received the fiscal overview for consideration as it prepares for forthcoming committee and floor actions.
(Attribution: Arnold Daja, Department of Legislative Services; introductions from Chair Polakovich Carr; additional presenters introduced but not quoted: Hiram Burch, Valerie Monroe, Colin Maloney, Elise.)
