The Montgomery County Council on Thursday approved the County’s $7.9 billion Fiscal Year 2027 Operating Budget, the $1.3 billion FY27 Capital Budget, and the $6.3 billion FY27-32 Capital Improvements Program following weeks of deliberations.
The approved budget includes a new progressive income tax structure that replaces County Executive Marc Elrich’s proposed across-the-board income tax increase. Under the Council-approved plan, residents earning more than $150,000 will pay a 3.3% income tax rate, while lower-income households will receive reduced rates on the first $150,000 of earned income. The Council also voted against the County Executive’s proposed property tax increase.
The budget package also includes the elimination of the Income Tax Offset Credit (ITOC), with the Council stating that $8 million generated from ending the credit will be redirected toward school heating, cooling, ventilation, and security projects across the County.
The FY27 Operating Budget passed in a 9-2 vote, with Councilmembers Andrew Friedson and Dawn Luedtke voting against it. The Capital Budget and Capital Improvements Program were approved unanimously. The budgets will take effect July 1.
The budget allocates more than $3.7 billion to Montgomery County Public Schools, approximately $574 million to the Department of Health and Human Services, and more than $317 million to the Department of Transportation. Funding was also approved for public safety agencies, affordable housing initiatives, environmental programs, economic development efforts, and major infrastructure and school construction projects throughout the County.
