Elrich proposes nearly 6% property tax increase to fully fund schools’ request

Montgomery County Executive Marc Elrich wants to raise property tax rates by just under 6% to fully fund the school system’s budget request for fiscal 2027.

Unveiling his proposal at Rockville’s Richard Montgomery High School on Friday, Elrich said the increase would give Montgomery County Public Schools officials the $3.8 billion operating budget they said they need to serve students.

Under his plan, money for MCPS accounts for 51% of the $8 billion overall county operating budget.

In the last year of his second four-year term, Elrich said this latest budget plan was one of the most challenging to draft. He cited massive federal layoffs that reduced tax revenue and a snowstorm that cost the county $45 million.

“We have a budget that preserves a lot. It has some cuts. It doesn’t have everything I’d like to have in there, but it’s a pretty strong budget and it funds the school system — everything they asked for,” he said.

Grace Rivera-Oven, president of the Montgomery County Board of Education, said she was so “ecstatic” with Elrich’s plan that she could dance the Macarena.

“It shows a true commitment of where education is a priority. I am so incredibly happy,” she said. “This is what a true partnership is.”

Tax hikes?

The County Council must vote on the budget and whether to increase taxes by the end of May.

“The budget decisions the Montgomery County Council makes this year will be some of the most challenging since the Great Recession,” Council President Natali Fani-González said in a statement.

“We must balance growing community needs with limited resources and new financial obligations hoist upon us from the federal government.”

Montgomery County lost a greater share of its federal workforce and its private sector jobs than any other county in the region from June 2024 to June 2025, according to a Brookings report on warning signs for the regional economy.

The county also had by far the biggest jump in mass layoff notices.

Elrich’s proposed hike would raise the tax to $1.089 per $100 of assessed value, an increase of about 5.89%.

The county executive also proposed an income tax hike of 0.1% that would raise the rate to the state-allowed maximum of 3.3%.

A county staff analysis found this increase would result in a $97 increase annually for someone with a $100,000 salary and a $26 increase for someone with a $50,000 salary. Residents making less than $50,000 would pay less or receive enhanced refunds.

Elrich has proposed tax increases in previous budgets. Last year, the council rejected his recommended income tax increase.

The council last voted to raise property taxes in 2024, a compromise that required cuts to Elrich’s operating budget proposal.

A boon for MCPS

County Chief Administrative Officer Rich Madaleno told reporters at a briefing Thursday that Elrich’s plan boosts schools’ per-pupil funding by adjusting for inflation, a change from previous years.

“We will finally be providing the school system more [adjusted for inflation] than what we did in 2010, which was the last county fiscal year before the Great Recession,” he said.

Superintendent Thomas Taylor presented the largest budget ever proposed by Montgomery County Public Schools in December, a 5% increase from the previous fiscal year. He said the figure reflected his priorities, reducing class sizes and raising staff salaries.

The Montgomery County Education Association, the union representing teachers, praised Elrich’s budget plan in a news release.

“This budget makes critical investments in educator recruitment and retention, special education, and school safety,” said David Stein, its president.

Here are six other takeaways from Elrich’s proposal.

Public safety’s slice

Public safety accounts for 18% of Elrich’s proposed operating budget, providing funding for fire and rescue, with its 1,383 staffers, and the police department, which has 1,853 employees, including 1,276 sworn officers.

Elrich would expand the county’s “Drone as First Responder” program.

Affordable housing

Elrich proposed $52.3 million for the county’s Housing Initiative Fund, which provides loans and grants to developers to build, acquire and preserve affordable housing.

An additional $100.4 million is earmarked for affordable housing acquisition and preservation. Rental assistance, funded at $28.4 million, remains a priority.

$50 million for development

Elrich’s main economic development investment in this budget is a $50 million commitment to the University of Maryland Institute for Health Computing campus at the North Bethesda Metro Station.

New ‘GROWTH districts’

Elrich wants to introduce “GROWTH districts.” The programs — the acronym stands for Growing Opportunity, Workforce, Transportation and Housing — would provide a dedicated funding mechanism for future transit and infrastructure improvements.

The districts set a 15-cent tax per dollar on commercial properties within one-half mile of a planned bus-rapid transit corridor or other strategic improvement.

Raises for some

Some county employees would get raises under Elrich’s plan. Based on negotiations with unions, professional firefighters would receive a 2.5% increase and employees represented by the Municipal and County Government Employees Organization would receive a 2.85% raise.

Smaller reserve fund

Elrich’s budget would shrink the county’s reserve fund. He proposed a 10.6% reserve rate, compared to 11.2% in the current fiscal year.

The county executive and council typically use the fund for programs that address urgent needs, such as emergency housing and food distribution. The county’s charter requires at least a 10% reserve rate.

Jack Hogan contributed to this article.