Baltimore County Council Fiscal Year 2027 Budget Overview - April 30, 2026

Auditor Liz Irwin presented an overview of the county executive's proposed fiscal year 2027 operating and capital budgets to the Baltimore County Council, focusing on fiscal sustainability. The presentation covered spending affordability guidelines, revenue trends, expenditure drivers, capital budget details, and pending legislation. Councilmembers asked clarifying questions and requested additional data, particularly on agency-level spending, vacancy information, and tax credits, to inform their upcoming budget deliberations.

Discussion Items

• Auditor Irwin reviewed the Spending Affordability Committee's guidelines for FY27, noting the proposed general fund spending aligns with the guideline and debt service and debt outstanding ratios remain within limits (9.3% vs 10.5% guideline for debt service; 1.6% vs 2.5% for debt outstanding). Key policy principles include maintaining reserves, fully funding ongoing costs, and limiting one-time funding for ongoing expenses.
• General fund budget drivers: Largest increases are for Baltimore County Public Schools (subject to maintenance of effort), compensation-related costs (public safety and general government), retirement, insurance, and debt service. A notable decrease appears in pay-as-you-go capital contributions and Permits, Approvals, and Inspections (due to cost shifts to Metropolitan District Fund). Ongoing retirement obligations constitute a significant share of budget growth.
• Revenue composition: Property and income taxes make up over four-fifths of general fund revenues. The budget anticipates using approximately $69 million in surplus alongside ongoing revenues. Combined reserves are projected at about 22% of revenues. Auditor noted the importance of careful use of one-time resources.
• Staffing: FY27 budget shows 232 fewer authorized positions across all funds compared to FY26. School system positions are down by 376; Councilman Patoka raised concerns about the impact on education and requested vacancy data to assess true reductions.
• Capital budget: FY27 capital budget totals about $216 million, with significant concentration in operational building projects, technology, and maintenance. Largest funding source is general fund pay-go. County has over $1.2 billion in authorized but unissued debt.
• Pending legislation: Bills on the May 21st agenda include the property tax bill (rate remains $1.10 per $100 assessed value; homestead cap at 4% reduces revenue by ~$54.9 million; other credits total ~$35.9 million), the personnel bill (cost-of-living adjustments and step/longevity changes costing ~$10 million in salary in FY27 and ~$10.6 million pension impact in FY28), the budget and appropriation ordinance ($5.14 billion excluding enterprise funds), and nine borrowing referendum proposals totaling ~$392 million for the November 2026 ballot.
• Councilman Patoka questioned where the historic preservation tax credit program is funded (Irwin believed it falls within the $35.9 million in other credits, to be confirmed). He also sought agency-by-agency projections of unspent funds to potentially reallocate to education positions, suggesting each million dollars could fund 8-10 teaching positions.
• Councilman Young requested a breakdown of the $69 million in operational capital projects and total expenditure on the disabled service-connected veteran tax credit. Auditor agreed to follow up.
• Councilman Jones noted that the revenue/spending intersection appeared to be flattening; Irwin clarified that actual revenues have been coming in higher than budgeted, so the gap is narrower but still present.

Key Outcomes

• The council will receive additional information from the auditor's office on: (a) agency-by-agency projected year-end unspent funds, (b) vacancy details from Baltimore County Public Schools, (c) detailed breakdown of operational capital expenditures, (d) location of historic preservation tax credit funding, and (e) total cost of the disabled veteran tax credit.
• The council will hold agency budget hearings in the coming weeks to dig deeper into the proposed budget.
• No formal votes were taken during this overview session; the next steps include deliberation on the bills scheduled for May 21st and eventual adoption of the FY27 budget.