5 takeaways from the proposed Prince George’s County budget

Prince George’s County Council members are holding workshops this month as they prepare to vote on County Executive Aisha Braveboy’s proposed fiscal year 2027 budget by June.

Despite numerous challenges that cut to the heart of the county’s economy, the proposed budget continues government services largely as normal without major spending cuts or tax increases. That’s thanks in large part to a windfall of income tax revenue economists say represents the still-delayed impact of massive cuts to the federal workforce.

But there are causes for concern that could make the next budget cycle even more challenging, according to experts interviewed by The Banner.

Here are five takeaways from the proposed budget that Prince George’s County residents should know.

Federal job cuts could be a ticking time bomb

Prince George’s County has been bracing for the economic fallout from the downsizing of the federal workforce and changes to contractors that were especially intense through the first months of 2025 under President Donald Trump’s administration.

Federal workers make up a sizable chunk of the county’s second-largest revenue stream: income taxes. But experts say the real impact from the second Trump administration could show up in the next budget cycle, for fiscal year 2028.

The delay is due to the timeline of when taxes are filed and temporary income boosts due to severance and early retirement packages, among other factors, economists said.

The budget might have been balanced more by good fortune than fiscal discipline

In January, the county’s independent fiscal watchdog, the Spending Affordability Committee, was anticipating a $58.3 million shortfall.

But that gap closed in the following months, thanks in large part to upward revisions to the tax projections for fiscal year 2027.

It’s unclear how long that will last. Economists predict the impact of federal job cuts could be felt most strongly in the coming months. Last fiscal year’s tax revenues might also have been bolstered by short-term income.

If the income tax respite ends, county officials would likely have to look at tax increases or spending cuts to balance the budget.

The executive and council budgets are growing

Some areas of the county’s budget are still growing despite a challenging fiscal outlook.

The Office of the County Executive is seeing an increase of $3.84 million, but officials say that is a continuation of spending levels that were amended midway through the current budget.

The County Council’s budget is also up $4.39 million, a 15% increase. Its audits and investigations division, meanwhile, was cut $366,400, nearly 19%.

Separate from the budget, the County Council passed pay raises for itself and the executive’s office last month.

There are flashing red warning lights that no one is talking about

Although much of the discussion of Prince George’s County’s economic outlook has centered on external factors such as the federal workforce and the state economy, there are also reasons to look inward.

One of them is the county’s stormwater management fund, which maintains pipes, drainage systems and flood-control infrastructure. That fund is projected to end the next fiscal year $94 million in the red, and the county is drawing down $40 million in reserves to keep it operational.

The county also carries about $1.6 billion in retiree health liabilities. It has funded only a fraction of those debts and is paying about $44 million per year on a pay-as-you-go basis, which economists do not recommend.

The future is especially hard to predict right now

Beyond Prince George’s County, the state is cash-strapped.

Some experts are predicting cuts to state aid to local counties next year, which might have been delayed this year due to the upcoming election.

There is also uncertainty around the next presidential election and whether some of the Trump administration’s cuts could be restored.

Meanwhile, the unemployment rate has ticked up in the county, from 3.4% in November 2024 to 5.4% as of February, according to labor data compiled by the Federal Reserve Bank of St. Louis.

But there have also been some important wins, such as the county’s courtship of the Sphere Entertainment venue.