County Executive Elrich Releases Recommended $7.1 Billion Fiscal Year 2025 Operating Budget

Courtesy Montgomery County

On Thursday, Montgomery County Executive Marc Elrich today released his recommended Fiscal Year 2025 (FY25) Operating Budget of $7.1 billion, an increase of 4.9 percent from the FY24.

Per the news release: The FY25 budget reflects growing demands for services, increased costs for operations, fulfilling contracts with County labor partners, a commitment to schools and a strengthened approach to economic development activities.

To access the entire recommended FY25 budget, click here. To watch the County Executive’s FY25 recommended budget presentation, click here.

The County Charter requires the County Executive to present a recommended budget by March 15 of each year. The recommended budget will be reviewed by the County Council over the next two months. The Council will adopt the new County budget in May, and it will go into effect on July 1.

“This recommended budget makes significant investments to improve the quality of life for our community without raising taxes,” said County Executive Elrich. “Our County’s current resources, while increasing, cannot fully support the growing needs of the community and demand for services. Consequently, I am not able to recommend funding for all requests for service enhancements I have received from stakeholders, community groups and County departments. Working within our current resources, my plan balances the needs of the community, economic forecasts and the growing cost of doing business. Looking to the future, we will need to have frank conversations about the structural imbalance that exists between the growing demands for County services and the revenue streams we currently have available to us.

“To continue to thrive, we must be able to provide businesses with access to talented employees and good infrastructure; provide residents with access to quality education and employment opportunities, affordable housing, safe neighborhoods, and a transportation infrastructure system that works well; ensure that our most vulnerable neighbors remain housed and have access to services so they can live healthy and thriving lives; attract talent to County government to deliver the services residents demand most; and address climate change, which is a threat to our very existence. This budget addresses each of these challenges.”

 

The recommended FY25 budget incorporated feedback from the County’s very diverse population. Over the course of four months, County Executive Elrich conducted 10 community conversations on the budget. These took place in five regions of the County, plus focused sessions with the Montgomery County PTA, older adults, and three sessions conducted in languages other than English (Chinese, Spanish, and Amharic). In addition, residents were able to participate virtually at several of these sessions making them more accessible. Over 3,000 people attended these conversations (in-person and online).

“I want to thank everyone who participated in this budget process,” said Elrich. “I received numerous letters and e-mail messages from and held meetings with members of the community regarding service needs. The feedback I received from the community conversations, letters, e-mail messages and meetings has been invaluable and was used in informing my funding recommendations for FY25. I also want to thank the incredible work of our community partners. County government alone could not reach everyone who needs assistance. Through our partnerships with nonprofit organizations and faith communities, we continue to connect more deeply with our residents to deliver much

needed services.”

Highlights of the FY25 Recommended Operating Budget:

  • Preserves vital services for County residents without any tax increases
  • Includes reserve balance of 11.6 percent, $106.1 million above the 10 percent reserve target
  • Funds 98.2 percent of MCPS’ request at $3.3 billion and provides third largest funding increase of $106.8 million over last year’s approved budget
    • $132 million above State’s Maintenance of Effort requirements
  • Fully funds Montgomery College’s request
  • Record funding of $365 million for climate change and environmental initiatives
  • Provides key investments in public safety departments to enhance crime prevention, fire, and corrections and rehabilitation services
  • Record $169 million in funding for affordable housing, including $65 million in new funds
  • Significant investment of $27 million for economic development, a 17 percent increase
  • Provides 3 percent inflationary adjustments to all of the County’s nonprofit partners

Public Schools and Services for Children:

“In order for Montgomery County to succeed, MCPS must succeed,” said Elrich.  “My recommended budget increases County funding for the MCPS budget by $106.8 million, which is the third largest ever increase for MCPS. Per-pupil funding grows by $888, and my recommended MCPS budget exceeds the State’s Maintenance of Effort requirement by $132 million. In addition to funding provided directly to MCPS, this budget contains significant funding to County departments supporting the mission of our school system and ensuring that children have access to early childhood care and programs, healthcare and mental healthcare services in our schools as well as funding to addressing youth safety needs.”

Highlights include:

 

  • Third largest increase for Montgomery County Public Schools if approved – $3.3 billion – $106.8million increase from FY24
  • $132 million above the State’s Maintenance of Effort Requirement
  • Funds 98.2 percent of the Montgomery County Board of Education’s request
  • Fully funds the negotiated compensation agreements for teachers and other MCPS employees to retain and recruit outstanding educators and other essential school staff
  • Shifts $33 million to MCPS’ base operating budget to address anticipated end of federal pandemic relief funding on September 30, 2024
  • $45.7 million in funding for school health services in the Department of Health and Human Services, which includes:
    • $2.2 million in additional funding to provide dedicated nurses for schools designated to be a “community school” under the Blueprint for Maryland’s Future
    • $600,000 to open the School Based Health Center at South Lake Elementary School
  • Expands the “Excel Beyond the Bell Program” to two additional middle schools – Eastern and Benjamin Banneker
  • Funds expansion of RecZone program and ongoing support for the Youth Safety Initiative Program
  • $440,000 increase for the Summer and Winter Break Children’s Food program
    • After leveraging additional State funding, this program is estimated to serve nearly 72,000 children in Montgomery County in FY25
  • $1.1 million in funding ($231,000 to be provided by budget amendment) for the Children’s Opportunity Alliance (COA)
    • An increase of $343,000 over FY24 approved budget
  • $22.6 million for the Early Care and Education Initiative (ECEI)
    • Funds programming such as Working Parents Assistance and the County’s Supplement to the State Child Care Scholarship Program that will provide childcare subsidies for families with incomes up to 450 percent of the Federal Poverty Level
    • Allocates funds for EquiCare Subsidy Seats Grant Program that will cover the cost of quality childcare for infants and toddlers (age 6 weeks to 36 months) seats for families that do not meet the eligibility criteria for current early childhood public programs

Support for Individuals and Families:

“Economic and social inequities exist in our community that are life or death struggles for many of our residents,” said Elrich. “I believe that my administration and this County should be judged first and foremost on how we take care of the most vulnerable as well those most impacted by historic inequities. My FY25 recommended budget makes targeted investments in programs that help uplift those who are struggling most.”

Highlights (in addition to the student/education programs listed above) include:

  • Nearly $3 million to increase homeless shelter capacity and provide overflow sheltering in the winter months
  • An additional $1.8 million in enhancements for Montgomery Cares to provide funding to cover nearly half of the cost of care
  • $600,000 in ongoing infectious disease prevention
  • Funding to provide a 3 percent increase to the Developmental Disabilities Supplement Program, the Adult Medical Day Care Supplemental Program and all our nonprofit partners
  • Over $17 million to address food insecurity – including $3 million in HHS and $14.3 million in the Office of Food Systems Resilience
  • Enhancements in County funds for the Summer and Winter Break Children’s Food Program to reduce hunger for children when schools are closed

Environmental Sustainability & Climate Change:

“As I have said many times before and as we know all too well, we are facing a climate crisis that is not easily solved and cannot be solved at the County level alone,” said Elrich. “We must do what we can and hopefully serve as a model for other jurisdictions around the country. I am recommending $365 million toward our efforts to fight climate change. My budget adds funds to help low-income residents access federal incentives and tax credits for climate-friendly investments that are available via the Federal Inflation Reduction Act of 2022 and the Jobs Act of 2023. We are investing in our continued transition to electric vehicles, expanding solar infrastructure, improving the tree canopy, reducing pollution in our rivers and streams as well as engaging more County residents in adopting local climate solutions.”

Highlights Include:

  • Recommending $365 million to fight climate change through transit, increased renewable energy, improved building efficiency, and nature-based solutions
    • $19.1 million for the Montgomery County Green Bank – an increase of almost $500,000 over FY24 budget
  • Adds $9 million in new spending to further the County’s efforts to fight climate change, including:
    • $275,000 to help under-resourced building owners like nonprofits and small businesses comply with the County’s Building Energy Performance Standards
    • Adds funds to help low-income residents access federal incentive and tax credits for climate-friendly investments
    • Enhancements to build out the County’s electric vehicle charging infrastructure
    • Adds a position and operating support to build out the County’s solar charging infrastructure
  • Adds funds to support climate change solutions in the transportation sector, clean energy efforts, and zero waste efforts

Transportation and Transit:

“While we are making some important improvements including the Great Seneca Transit Network, I continue to be concerned about our ability to build transportation infrastructure,” said Elrich. “Additional resources are essential, particularly to support important investments to enhance mobility within and around the County, support economic development, and improve safety for transit riders, pedestrians, bikers and drivers. While Northern Virginia races ahead of us targeting taxes to implement transportation improvements and address congestion, we continue to be hamstrung by constrained resources and lack of authority to implement solutions as done in Northern Virginia. We need to understand the importance of targeted taxes as an investment in a successful future.”

Highlights Include:

  • Provides funds for the launch of the Great Seneca Transit Network that will provide frequent transit service and improve mobility and access to jobs in Rockville, Gaithersburg and Shady Grove areas
  • Provides much needed funding for repairs and accessibility improvements for bus stops and bus shelters
  • Adds funds to address backlog of roadside tree and stump removal and tree plantings
  • Adds funds for residential road resurfacing
  • Additional funding to help us achieve our Vision Zero goal, including funding to install raised pavement markers, refresh crosswalk markings and maintain street signs as well as an increase to the Safe Routes to School program

Affordable Housing:

“Our goal is to produce, protect and preserve as much affordable housing in our County as possible,” said Elrich. “When families are displaced due to high housing costs, schools, neighborhoods and communities are negatively impacted. My FY25 recommended budget allocates over $169.4 million, including $65 million in new funding, to expand the preservation and production of affordable housing to our most economically burdened residents. I am recommending $56.2 million in the Housing Initiative Fund (HIF) that includes $22.9 million for our Rental Assistance Program. Additionally, I am recommending $113.2 million in funding for three Capital Improvement Projects (CIP), including the Affordable Housing Acquisition and Preservation project, the Nonprofit Preservation Fund and the Revitalization for Troubled and Distressed Common Ownership Communities project.”

Highlights Include:

  • FY25 budget allocates over $169.4 million to expand the preservation and production of affordable housing to our most economically burdened residents
  • $56.2 million in the Housing Initiative Fund
  • $22.9 million for the Rental Assistance Program (RAP) to continue providing rental assistance and supportive services to help the County’s most vulnerable residents
  • $113.2 million in CIP budget
  • $65 million in NEW capital funding for the Affordable Housing Acquisition and Preservation project
  • Funding for the Nonprofit Preservation Fund, and the Revitalization for Troubled and Distressed Common Ownership Communities project
  • Continues funding to support the “Building Neighborhoods to Call Home,” “Design for Life” and “Home Ownership Assistance” programs

Public Safety:

“We are expanding our efforts to make our communities safe and secure,” said Elrich. “The recommended FY25 budget includes funding to increase recruitment and improve staffing of first responders, investing in new technologies that will help suppress crime and apprehend criminals while continuing our commitment to a holistic approach to provide resources and services that create more positive opportunities for young people. Additionally, we continue to invest in our best public safety resource, the men and women who serve to protect and rescue us.”

Highlights Include:

Police Department

  • Expands the innovative “Drone as a First Responder” pilot program to Germantown/Gaithersburg and Bethesda and extends hours in Silver Spring and Wheaton
  • Establishes a grant program to aid affected businesses in establishing safety plans as required by Bill 14-23
  • Funds tools to support digitization of critical historical records catalogues and installation of computer/printer kiosks at district stations to facilitate community access to public records

Correction and Rehabilitation

  • Funds to provide for the year-round operation of the Pre-Release Center, which is a national model
  • Funds to repair kitchen equipment in support of the relaunched Bakery Program, which provides crucial employment skills
  • Continue retention bonuses for correctional health nurses

Fire and Rescue Service

  • Leverages funds from the State’s Emergency Service
    • Transporter Supplemental Payment Program (ESPP) to:
      • Provide additional staffing at Sandy Spring Fire Station 40
      • Launch a new Girls Fire Camp to diversify gender representation in the fire service by empowering girls to consider firefighting careers
  • Adds three firefighter positions in the Fire and Explosives Investigations Unit to increase effectiveness and free up law enforcement personnel
  • Adds funds for early detection cancer screenings and provide COVID booster vaccinations for career firefighters

Mental Health and Substance Misuse

  • As federal funding terminates, the current Mobile Crisis Teams are funded with County funds and two additional teams are recommended – for a total of seven teams
  • Establishes the Opioid Abatement Fund in the budget, funded with the County’s share of proceeds from the State’s legal settlement with opioid manufacturers and distributors
  • Establishes the Office of Prevention and Harm Reduction using Opioid Abatement Funds
  • Continues programming that provides targeted emergency interventions, public awareness campaigns and grant funding

Libraries and Recreation:

“Last year we began offering free passes to residents to our Department of Recreation fitness centers; our libraries continue to find new and creative ways to engage audiences of all ages, and recently we opened the Silver Spring Aquatic and Recreation Center to great fanfare,” said Elrich. “It is evident from the positive response to these programs and resources that our libraries and recreation centers matter to the residents and communities of Montgomery County. In our FY25 budget, I am pleased to increase funding to meet public demand for online publications as well as increasing non-English language books and materials. Additionally, we are going to continue our free access to fitness centers and provide additional funding to senior programming.”

Highlights Include:

Libraries

  • Enhancements to expand access to digital materials to meet increased public demand
  • Expansions to the County’s World Languages Collection to serve customers who speak languages other than English

Recreation

  • Continuation of free fitness passes for Montgomery County Recreation centers
  • Expansion of Excel Beyond the Bell to Eastern and Benjamin Banneker middle schools
  • Expanding RecZone, a youth program at high schools
  • Funds for Senior programming and the Senior Barbecue Bonanza

Economic Development:

“My FY25 Recommended Operating Budget includes a more targeted and improved approached to economic development with approximately $27.3 million to support growing the County’s economy, an increase of 17 percent from the FY24 Approved Operating Budget,” said Elrich. “While we’re at the center of the #3 biohealth cluster, we’ve been assessing what critical pieces are missing; we’re working to make sure that companies don’t tell us ‘we’d love to come here but for…’ This budget gives us capacity to add critical pieces of the puzzle to bring and retain these important businesses. My recommendation builds on our goal for an inclusive and innovative economy by leveraging our talented workforce, our existing biohealth strengths, innovation economy, location and quality of life assets. Economic development is not the responsibility of any one department or organization, and these activities are funded through multiple County departments and economic development organizations. Through these combined efforts, the County supports business and startup growth, attracts domestic and international relocation and measures impact to continuously improve service delivery.”

Highlights Include:

  • Provides a total of $27.3 million to support growing the County’s economy, an increase of 17 percent from FY24
    • Funding for “BioHub Maryland at Montgomery County” to train our workforce at a state-of-the-art multifunctional facility equipped with cutting edge industrial bioprocessing equipment
    • New capital investments to refresh our existing incubators into innovation centers
    • Establishes a robust partnership with private and nonprofit partners for fostering entrepreneurship and innovation
    • Creates a new industry-led County alliance focused on the high tech and life sciences sector ecosystem in Montgomery County
    • Proposes establishment of a $7.5 million fund for High-Growth Small Business to support companies with high growth potential and grow jobs in the County. The fund will provide access to much-needed capital to start or grow these businesses
    • Two additional business liaisons for the Montgomery County Business Center team to provide outreach and direct assistance for businesses
  • Total budget of $2.4 million to WorkSource Montgomery – a 21 percent increase of the prior fiscal year that includes support for the Summer RISE youth program and programming at the Montgomery County Correctional Facility to support successful reentry opportunities

Community Partners:

“This budget strengthens and improves the County’s relationship with community partners,” said Elrich. “The services offered by our partners help us to address poverty and social inequity, provide emergency services and health care, serve disconnected youth in our community and ensure that seniors and persons with disabilities receive quality services. These partnerships help our neighbors who are most in need access critical services. I am recommending a three percent inflationary adjustment for nonprofit contracts across County government. Additionally, this budget also expands the capacity of the Office of Grants Management by creating a pool of flexible funding – some of this will be used to help us go after federal grants.”

Highlights Include:

  • Provides a three percent inflationary adjustment to all nonprofit service provider contracts and community grants
  • $6.5 million to continue to fund all multi-year Community Grants Non-Departmental Account awards
  • $2 million for Nonprofit Technical Assistance and Management Support grants
  • $1.2 million for a Community Projects Fund for small grants
  • $1 million for a nonprofit incubator
  • $1.5 million in cost sharing grants to provide matching funds for capital projects
  • $1.2 million for Nonprofit Security Grants – $900,000 in this budget plus and additional $300,000 to be submitted by budget amendment

Effective and Sustainable Government:

“My recommended operating budget makes significant investments in one of our greatest assets – our employees and the operations of the Montgomery County government,” said Elrich.  ”As part of the recommended FY25 operating budget, we are recommending increases to the Board of Elections to handle the 2024 Presidential Election. My budget provides funding for the Department of Technology and Enterprise Business Solutions (TEBS) to continue to modernize Montgomery County Government information technology systems. And we are making significant changes to the Cable Fund by identifying additional revenue streams and a strategic plan to guide our Public, Education, and Government communications efforts moving forward.”

Highlights Include:

  • $4.4 million increase to the Board of Elections to support for the Presidential Election
  • $333,000 in funding for the Public Election Fund
  • Funds to modernize the County’s information technology systems and enhance Cybersecurity
  • To take advantage of efficiencies in technology, shifts MC311 to the Department of Technology and Enterprise Business Solutions
  • Provides for ways to explore novel uses of artificial intelligence (AI) to provide efficient information technology services and revolutionize the way County government functions
  • Expands capacity of the Office of Grants Management by creating a pool of flexible funding for federal grant pursuit and management tools that can be allocated strategically across departments

Creating a 21st Century Workforce:

“Our Office of Human Resources (OHR) works to build a strong and resilient workforce to meet the service needs of our diverse and growing community – today and into the future,” said Elrich. “With historically low unemployment rates and increased teleworking career options, the County – like every local government – is experiencing persistent staffing challenges. In recognition of these new realities, I have directed repurposing of six existing positions and funding for online hiring platforms, to strengthen our recruitment program. Along with the new applicant tracking system, these resources will bring the County’s recruitment and hiring efforts current with best practices, reduce time to fill and bring increased visibility to the County as a preferred employer. The budget also funds management training programs, to increase the effectiveness of the County’s leadership teams. Additionally, to reform the County’s long outdated classification plan and bring transparency to the County’s pay practices, the budget funds a comprehensive review of job classes and compensation structures, with a view towards developing and implementing a competitive pay philosophy.”

Highlights Include:

  • Funds to modernize our recruitment practices, enhance leadership effectiveness, and foster transparency and equity in our classification and compensation structures
  • Repurposes six vacant positions for the Office of Human Resources and increase funding for online hiring platforms to strengthen the County’s recruitment efforts
  • Provides ongoing funds for a management training program that we piloted in FY24 – this is critical to increase the effectiveness of the County’s leadership teams
  • Funds to finally update the County’s long outdated classification plan and bring more transparency to the County’s pay practices
  • Centralizes labor relations functions within the Office of Labor Relations by repurposing five vacant positions from elsewhere in County government to bolster these efforts
  • Eliminates 60 positions and repurposes 40 positions, the vast majority of which have been vacant for longer than one year

Use of Additional Federal Reimbursement:

“The County has been approved to receive $33 million in reimbursements from the Federal Emergency Management Agency (FEMA) for COVID-19 related expenditures – we are just waiting for the check,” said Elrich. “Consistent with the County’s fiscal policy, this revenue assumption is not included in this budget submission. It is highly likely that we will receive these revenues while the Council is considering my recommended budget. When we receive the funding, I intend to submit the following items as budget amendments using the revenue from this reimbursement so the Council can consider them as part of the FY25 Recommended Operating Budget package.”

 

Other Enhancements:

“My budget fully funds the request of Montgomery College,” said Elrich. “Because of the efforts begun by my Administration, and in collaboration with the Montgomery College, I am pleased to report that the East County Education Center will offer classes during the spring 2024 semester, with a more robust schedule launching in summer and fall 2024.  Additionally, I am recommending a budget increase for the Maryland-National Capital Park and Planning Commission of 6.2 percent for the Administration Fund and 6.3 percent for the Park Fund, and an 8.5 percent rate increase for WSSC consistent with the request from the Commission and in line with the approved spending affordability limit. As part of the final year of the negotiated three-year phased implementation plan, my budget increases the Payments to Municipalities budget by $2.1 million, including the estimated cost for speed camera reimbursements. For the third year in a row, I have included funding for the Office of the People’s Counsel, and I hope that this will be the year that the Council will include this funding.”

Highlights Include:

  • Maryland-National Capital Park and Planning Commission – total budget increase of $10.8 million (including debt service)
  • WSSC Water – 8.5 percent rate increase per the Spending Affordability Guidelines, consistent with the request from the Commission
  • Payments to Municipalities budget increases by $2.3 million and reflects the final phase of the three-year negotiated plan to address tax duplication issues
  • Fully funds the request of the County Council and adds two additional staffers to the Office of Inspector General to support MCPS investigations
  • Adds funding to restore the Office of the People’s Counsel in the Legislative Branch

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