Montgomery County Executive Marc Elrich this week released his recommended Fiscal Year 2024 (FY24) Operating Budget of $6.8 billion, which is an increase of 7.7 percent from the FY23 approved all funds budget (County Government plus outside agencies). The recommended FY24 budget reflects record level and significant investments for Montgomery County Public Schools (MCPS), Montgomery College, affordable housing, economic development, public safety and efforts to combat climate change.
To access the entire recommended FY24 budget, 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 late May. The new budget will go into effect on July 1.
“While the Federal funding to assist residents who have been impacted by the pandemic has reached its end, the need for services and assist remain great,” said County Executive Elrich. “County expenditures are higher because we choose to continue funding programs that support residents who need help stabilizing their lives while also facing the realities of the highly competitive labor market and tremendous inflation. This budget is about choosing to maintain services and the social safety net that we created during the pandemic, while also providing record funding for education, affordable housing, combatting climate change and public safety.”
Due to the strength of the local economy and supplemented by aid received from the State and Federal governments, the County’s revenue streams have substantially outperformed the County’s fiscally prudent revenue projections for both FY22 and FY23. However, economic indicators are signaling that a mild recession could take place later this year.
Strong capital gains attributed to tax returns from calendar year 2021 have resulted in income taxes producing greater than forecasted year-end reserves, which has resulted in a reserve of 14 percent of revenues. This is well beyond the County’s commitment to hold 10 percent of revenues in reserve. The surplus in reserve funds gives the County an opportunity to make targeted investments that will help to maintain and enhance services in anticipation of a recession, while making reductions to select programs to reduce expenses.
As is well known, COVID-19 has taken a tremendous toll on students and their teachers. The needs to address the learning and the social and emotional loss are staggering. The recommended budget meets the request of the Board of Education—a request that is a record $296 million above the funding provided in FY23 and $264 million over maintenance of effort. The funding is needed to recruit and retain outstanding educators, teachers and other essential school staff, as well as to address the increase in special education enrollment. The increase also is needed to improve student performance. According to the results of the 2022 Maryland Comprehensive Assessment Program (MCAP) test, only 31 percent of MCPS students scored proficient in math, and 53 percent scored proficient in English.
To meet these critical needs, County Executive Elrich is recommending a 10-cent increase in the County’s property tax rate. All of the revenue generated by that increase will be exclusively directed to MCPS. The increase is to correct an ongoing imbalance in per-student spending. Taking inflation into account, the total per-student appropriation peaked around FY10 and has never fully recovered. Adjusted for inflation, per pupil spending has gone down more than $3,000 in comparison to 2010. In the past couple years, although nominal per-student spending has been going up, real spending has been slightly declining.
Montgomery County currently has the lowest commercial property tax and second-lowest residential property tax in the National Capital region. Throughout the State of Maryland’s 24 jurisdictions, there are 11 other jurisdictions with a higher property tax rate than Montgomery County. In terms of per-pupil spending, Montgomery County is currently fifth among the largest school systems in the State. If the proposed 10-cent tax increase is approved by Council by a majority vote, Montgomery County will become third-highest in the State for per-pupil spending.
Highlights of the FY24 Recommended Operating Budget
- Preserves vital services for County residents.
- Includes reserve balance of 11.4 percent, $86 million above the 10 percent reserve target.
- Fully funds the MCPS request at $3.2 billion and provides record funding increase of $223 million over last year’s budget.
- $264 million above State’s Maintenance of Effort requirement.
- Additional revenue to be raised with a proposed $0.10 property tax increase solely devoted to schools.
- Record funding for climate change and environmental initiatives.
- Additional investments in economic development and workforce training.
- Reestablishes funding for the Office of the Peoples Counsel.
- Provides additional support for the County’s community partners.
- Applies racial equity and climate change lenses that are reflected in decisions throughout the budget.
- Largest public outreach for budget with eight budget forums, including dedicated Spanish-language and Chinese-language forums.
“For decades, our schools have played a central role in what makes people want to live here and businesses to start, relocate, and grow here,” said County Executive Elrich. “Recommending a 10-cent increase on the property tax was not an easy decision. But we are clearly at an inflection point, and preservation of our schools, ensuring our ability to retain and recruit the best educators, and ensuring their progress in producing the kind of students that we expect our school system to produce are challenges that we cannot turn our backs on. A failure to address these issues would lead to unwinding all of our other efforts to make this County more economically competitive, attract jobs and maintain a quality of life for current and future residents.”
- Largest budget ever for Montgomery County Public Schools if approved of $3.2 billion—$288.5 million increase from FY23.
- $264 million above the State’s Maintenance of Effort Requirement.
- Funds 99.8 percent of the Montgomery County Board of Education’s request.
- The increase in funding for FY 2024 is due, in part, to:
- Providing a high-quality education for a growing number of students enrolled in MCPS.
- Continuing recovery from learning loss due to the pandemic.
- New search-based innovative approaches to teaching and learning.
- Competitive salaries to retain and recruit staff.
- Rising costs of health benefits for school employees and retirees.
- Opening a new elementary school in the Clarksburg cluster.
- Increased costs of goods and services including diesel fuel for school buses and utilities for schools.
- $38.4 million for school health services in the Department of Health and Human Services.
- Includes funding to operate the new Linkages to Learning and school-based Health Center at Southlake Elementary School (including a new nursing position and school health room technician).
- $23.5 million available for the Early Care and Education Initiative.
- Increase of $570,000 to facilitate the expansion of the State’s Autism Waiver Program in the County and to meet increased demands for the program, which will be partially offset by additional State revenue.
- $550,000 for the Department of Recreation to operate two additional Excel Beyond the Bell sites at Harriet Tubman and Watkins Mills elementary schools.
- $450,000 increase to the TeenWorks program.
- $730,000 in funding for the Children’s Opportunity Alliance.
“The Biden Administration has signaled that the Federal Public Health Emergency declaration related to the COVID-19 pandemic will end on May 11, 2023,” said County Executive Elrich. “This means there will be a loss of significant Federal funding designed to support individuals and families negatively impacted by the pandemic. While the emergency response phase of the pandemic may officially be over, the realities on the ground are hard to ignore. The COVID-19 pandemic shined a spotlight on many of the social and economic inequities in our community that we have faced for decades. In a County that has committed to being more equitable and inclusive, we cannot return to our pre-pandemic approach to addressing these inequities.”
- $7.4 million in County funds to reshape the County’s Working Families Income Supplement to match a total of 70 percent of Federal EITC (when combined with State EITC).
- Two percent increases to the County’s supplemental payment programs to service providers of developmentally disabled residents and adult medical day care providers
- $6.2 million for initial funding for Food Staples Program to directly provide food to individuals and families most at need.
- $5.8 million budgeted for future potential COVID-19 outbreak response (testing, vaccination administration, outbreak management and COVID sheltering).
- $2 million increase to Montgomery Cares reimbursement rates to begin to right-size the County’s share of the total cost of care.
- Significant funding increases for the African American Health Program ($800,000), Latino Health Initiative ($950,000) and Asian American Health Initiative ($775,000).
- $735,000 increase for the third year of the Guaranteed Income Pilot Program.
- $1.1 million to fund new Office of Food Systems Resilience.
“The climate emergency is an imminent and existential threat,” said County Executive Elrich. “We must do our part to address climate change and protect our environment. Whether it is investments in sustainability, resilience, mass transit, building energy, solar or EV’s, every dollar counts toward our Climate Action Plan goal of a 100 percent reduction of greenhouse gas emissions by 2035. We must lead by example and show other local jurisdictions around our region, State and nation that they too can have a similar impact.”
- Record funding to address climate change—$271.6 million total in the operating and capital budgets.
- Record funding of $19.3 million for the Montgomery County Green Bank, an increase of almost $700,000.
- Additional funding for the Department of Environmental Protection to address climate change:
- $250,000 increase for climate grants.
- $250,000 increase for energy audits for buildings subject to BEPS.
- $250,000 increase for Community Choice Energy consultant support.
- $100,000 for Electric Vehicle Co-op Management Program.
- $750,000 increase from the Tree Canopy Fund to plant more shade trees.
- Enhancements to water quality programs: $370,000 in additional funding for illicit discharge detection and elimination to reduce pollution and $200,000 increase for Rainscapes grant program to increase the rate of tree plantings.
- Funding new positions to reduce pollutants in waterways, improve water quality and monitoring efforts.
“As commuters have continued to return to the office following the pandemic, our traffic and congestion problems are returning to pre-pandemic levels,” said County Executive Elrich. “It is more important than ever that we continue to persuade motorists to opt for public transportation, continue to make progress on our pedestrian and bike infrastructure, as well as our Vision Zero safety efforts. These measures not only make our roads safer, but are also more sustainable for our environment and help us combat climate change.”
- $61.7 million in the FY24 operating budget for Vision Zero traffic, bicyclist and pedestrian efforts.
- Maintains Ride On service at current levels pending recommendations of the “Ride On Reimagined” study.
- Adds more than $300,000 to replace aging Bethesda Circulator buses with electric buses.
- New fence atop Wayne Avenue Garage in Silver Spring to restrict access to rooftops of nearby buildings.
- Additional targeted investments to increase frequency of inspections for short span bridges.
- Reduced parking revenues have created budget pressures in parking district services to maintain service levels and condition of garages:
- Instituting Saturday enforcement.
- Reducing parking district transfer to the urban districts.
“Secure and affordable housing is a basic human right,” said County Executive Elrich. “This budget continues to provide record funding for services that address affordable housing and homelessness in our community. My FY24 recommended budget provides affordable housing and related services across the full continuum of housing in the County. We are losing affordable units faster than we can replace them. Replacing them is not enough—we need more than we have now. We are building affordable units and we are working with affordable housing providers to preserve others. But it simply is not enough.
“In 2000, Montgomery County had about 43,000 naturally occurring affordable housing units. By 2020, that number was down to about 22,000. The County is projected to lose another 10,000 in the next 10 years. The units did not just disappear; they simply became unaffordable. The budget provides the County and its partners the money to develop more affordable housing for more residents.”
- Allocates approximately $124 million to expand the preservation and production of affordable housing.
- $57.7 million for the Montgomery Housing Initiative operating budget.
- $32.0 million for the Affordable Housing Acquisition and Preservation project.
- $4.1 million in Federal grants.
- $30.2 million for the Naturally Occurring Affordable Housing (NOAH) Capital Project.
- Nearly $35 million in rental assistance funding.
- $18.6 million in the Department of Health and Human Services.
- $16.3 million in the Montgomery Housing Initiative Fund.
- $3 million to continue providing overflow sheltering in hotels.
“Investing in the safety and security of our residents and communities is a top priority,” said County Executive Elrich. “Our approach to public safety investments is holistic and targeted to support our officers, fire fighters and EMTs, as well as the communities who count on their protection. Last year, we increased the pay for police officers to be more competitive with our neighbors. This year, we are offering signing bonuses to better attract new officers. We are also investing in recruitment efforts for our Department of Correction and Rehabilitation, as well as providing improved mental health supports for our first responders and for residents who experience traumatic events.”
- Police Department
- $20,000 hiring bonuses for new officers.
- Launching the “Drone as a First Responder” pilot program.
- Development of a police survey platform to collect community feedback.
- Advances recommendations from the Effective Law Enforcement for All (ELE4A) report.
- Creates a civilian curriculum developer to invest in education and training.
- Adds public safety instructors to improve officer firearm training.
- $500,000 to fund rebates for the purchasing of security cameras.
- Correction and Rehabilitation
- Funding to reopen Pre-Release and Reentry Services Center.
- Additional mental health support for DOCR personnel.
- Addresses structural budget deficits for food and pharmacy services due to inflationary pressures.
- Additional targeted funds to enhance recruitment efforts.
- Fire and Rescue Service
- Leverages funds from the State's Emergency Service transporter supplemental payment program (ESPP) to:
- Add human resources and procurement support.
- Adds support to expedite misconduct investigations to reduce unnecessary overtime.
- Adds fleet and technology support to keep apparatus in good repair and support technology that keeps first responders safe.
- Creates civilian diversity equity and inclusion officer.
- Adds community action coordinator and community risk reduction specialists to deliver targeted prevention and education services and address community needs in the aftermath of a traumatic event.
- Adds mental health and critical incident stress management support.
- Creates team in Department of General Services to oversee maintenance of volunteer-owned fire stations using state ESPP funding.
“Our libraries and recreation department are important epicenters in our communities for residents to gather, learn, and attend events,” said County Executive Elrich. “I am very appreciative of the work of the employees from both departments for their compassion, engagement and ability to improvise during the pandemic. As interest is renewed in libraries and recreation services, we are providing important investments and popular programs such as our “Free in 23” initiative that provides free recreation fitness passes.”
- Montgomery County Public Libraries (MCPL)
- $825,000 so MCPL can fill additional librarian positions to improve customer service.
- $100,000 to increase world languages collection (Spanish and Chinese).
- Funding for security enhancements.
- Continues “Free in 23” initiative that provides free recreation fitness passes to individuals.
“The No. 1 factor for businesses today is finding talented and skilled workers,” said County Executive Elrich. “Our economic competitiveness throughout this region and, quite frankly, throughout the world, depends on our ability to provide our residents every opportunity to be well educated and thoroughly trained to earn a well-paying job. Our investments in Montgomery College, as well as our new partnerships with the University of Maryland in North Bethesda and the Universities of Shady Grove, are demonstrating to businesses that we committed to their needs. Furthermore, our economic development efforts are equitable. We recently launched the new Business Center to focus on small and minority businesses while we are focused on progressing development opportunities throughout the County, and specifically, in communities that have been long neglected.”
- Fully funds Montgomery College’s budget request, including funding for the new East County campus.
- $5 million for the UM-Institute for Health Computing project at the North Bethesda Metro Station.
- $6.4 million for the Montgomery County Economic Development Corporation.
- $4 million for the Economic Development Fund.
- $2.2 million for WorkSource Montgomery.
- Two additional business liaison positions to proactively assist and engage small businesses throughout the County.
- Funding to support a marketing plan and business development efforts for the White Oak Science Gateway.
“The success of our government is strong because of the partnerships we have with our community nonprofits and advocacy organizations,” said County Executive Elrich. “Last year, we launched our Office of Grants Management, provided needed support for abortion providers following the Supreme Court’s decision to overturn Roe v. Wade and support safety efforts for our nonprofit and faith communities through our security grant program. We look forward to continuing these supports in FY24 and expanding our relationships with community partners.”
- Expands Office of Grants Management by adding two staffers.
- 3 percent inflationary adjustment for nonprofit service provider contracts across County government.
- 28 programs previously funded through community grants non-departmental account budget moved to base budgets of departments ($1.7 million).
- Reforms community grants process based on community and provider input.
- Establishes multiple rounds of funding for community grants programs that will be awarded throughout the year.
- Provides opportunity for new programs and partners as well as for traditional partners and programs.
- Provides bridge funding for nonprofits currently funded in community grants budget.
- $2 million for capital cost sharing community grants.
“My recommended operating budget makes significant investments in one of our greatest assets—our employees,” said County Executive Elrich. “The collective bargaining agreements reached with our employee unions are necessary not only to keep up with inflation, but also to maintain competitiveness in the labor market. These agreements will enable Montgomery County to continue to retain and attract the high-quality individuals that provide critical services to our residents.”
- $1.6 million increase for Board of Elections for election support.
- $250,000 million for the recommendation for the Public Elections Fund.
- Additional critical support for the Office of Human Resources targeted to recruitment and retention efforts, leadership training and updating the County’s outdated classification system, decreasing human resources transaction time.
- Recognizes the reality of a higher-than-normal vacancy rate by targeting reductions to departments with a relatively high number of long-term vacant positions.
- OHR, OMB and OLR will work to evaluate the continuing need for those vacant positions.
- Significant enhancements to the County’s technological infrastructure, including funding to revamp the County’s websites.
- Recognizes structural funding issues of the Cable Fund by reallocating or reducing expenditures.
“I am pleased that we are able to recommend budget increases to both M-NCPPC and WSSC, as well as provide payment to our municipalities following last year’s correction of tax duplication payments that occurred for far too many years,” said County Executive Elrich. “Additionally, transparency, oversight and consumer protections are critical to both our government and our residents. In this budget, I am recommending additional staff to the Office of Inspector General and funding for the restoration of the legislative branch’s Office of People’s Counsel.”
- Maryland-National Capital Park and Planning Commission: total budget increase of $8.9 million.
- WSSC Water: 7.0 percent rate increase per the Council’s Spending Affordability Guidelines.
- Payments to municipalities budget increases by $1.6 million to implement the second year of the three-year negotiated plan to increase tax duplication payments and fund speed camera payments.
- Fully funds request of the County Council and adds two additional staffers to the Office of Inspector General to support investigations.
- Adds funding to restore the Office of the People’s Counsel in the legislative branch.