Ann

The Montgomery County Council has introduced three bills intended to assist certain homeowners, families with children and public-school employees. These proposals may provide meaningful assistance to qualifying residents. But they also raise serious questions about fiscal responsibility, fairness and who is being left behind.

The fiscal-impact statements are expected before the October 13 public hearing. Until they are released, residents cannot determine the full cost of the proposals or whether they will add to the County’s projected FY28 structural deficit.

What Is the Council Proposing?

Bill 46-26: Child Tax Credit

Bill 46-26 would provide up to $500 per qualifying child for families with extremely low incomes.

The full credit would generally be available when a household’s federal adjusted gross income is below $15,000. It would then decrease by $50 for every additional $1,000 or portion of $1,000 above that threshold.

The credit is limited primarily to children under age six and children under age 17 with qualifying disabilities.

What we still need to know:

• How many Montgomery County children would qualify?

• What would the program cost annually?

• What would it cost to administer?

• How will eligible families learn about and claim the credit?

Read Bill 46-26

Bill 47-26: Expanded Homeowners’ Tax Credit

Bill 47-26 would raise the income ceiling for the County’s supplemental Homeowners’ Property Tax Credit from $75,000 to $106,800.

This does not mean every homeowner earning under $106,800 would receive the same amount. The credit would depend on household income, property taxes and the program’s formula. Applicants must also meet the program’s other eligibility requirements.

What we still need to know:

• How many additional homeowners would qualify?

• What would the average credit be?

• How much County revenue would be reduced?

• How many eligible residents are expected to apply successfully?

• Would the expanded credit meaningfully offset the loss of the $692 Income Tax Offset Credit?

Read Bill 47-26

Bill 48-26: $2,500 Credit for Certain MCPS Employees

Bill 48-26 would provide a property-tax credit of up to $2,500 to eligible Montgomery County Public Schools employees represented by MCEA or SEIU Local 500.

The employee must own a home in Montgomery County, use it as a primary residence and occupy or expect to occupy it for at least nine months of the tax year.

Higher-level administrators would be excluded. If two eligible employees own the same home, the property could receive only one credit.

The bill does not appear to contain an income limit.

According to the sponsor’s memorandum, 4,949 MCPS employees owned homes in Montgomery County in tax year 2024, although not all would qualify. If all 4,949 homeowners qualified, the maximum annual cost would be: 4,949 × $2,500 = $12,372,500

The actual cost would likely be lower. However, if 4,000 employees qualify, the annual reduction in County revenue would still be approximately $10 million.

Read Bill 48-26

What About Retired Teachers?

Under the current language of Bill 48-26, retired teachers would not qualify.

The bill defines an eligible public-school employee as someone currently employed by MCPS and represented by MCEA or SEIU Local 500. Employees would have to reapply every year and remain continuously eligible.

Once a teacher retires and is no longer an MCPS employee or bargaining-unit member, the credit would end.

That raises an important question: If this proposal is intended to help educators remain in Montgomery County, why does it exclude retired teachers living on fixed incomes—some of the homeowners most vulnerable to rising property taxes?

Retired teachers might qualify separately under Bill 47-26, but only if they satisfy the Homeowners’ Tax Credit program’s income, asset and other eligibility requirements.

Remember the $692 Credit?

Beginning July 1, 2026, the Council eliminated the $692 Income Tax Offset Credit previously received by more than 192,000 owner- occupied households.

The approximate value of that broad homeowner relief was: 192,000 homeowners × $692 = approximately $132.9 million

The Council is now proposing targeted credits for selected groups. These bills may help those who qualify, but they will not restore the $692 lost by most homeowners.

A homeowner who does not qualify for one of the new programs still loses the entire $692. Renters generally receive no direct property tax relief from these proposals.

Why You Need to Watch Everything This Council Is Doing

Residents continuously see the Council approving or proposing new programs, incentives, abatements and tax credits. What receives far less attention is how the County will pay for them.

Montgomery County is already facing a projected FY28 structural deficit of approximately $292-$293 Million.

The County must balance its budget. Therefore, a structural deficit may eventually require some combination of:

• Program and staffing cuts

• Higher property or income taxes

• Additional fees

• Use of reserves or other one-time funds or

• New recurring revenue.

A tax credit may not appear as a traditional expenditure, but it reduces the revenue the County would otherwise collect. That affects the same bottom line.

At the same time, the County has:

• Eliminated the broad $692 homeowner credit;

• Approved a 20-year, 100 percent property-tax abatement for qualifying office to housing conversions;

• Used one-time resources to pay for ongoing expenses; and

• Continued proposing additional targeted credits and incentives.

Some of these programs may serve worthwhile purposes. But every dollar the County spends or chooses not to collect must eventually be accounted for.

Who pays when the math no longer works?

When the fiscal impact statements are released, residents should look for answers to the following questions:

1. What is the annual cost of each bill?

2. How many residents are expected to qualify?

3. What would the average recipient receive?

4. What administrative expenses would the County incur?

5. What recurring revenue would fund the credits?

6. Are these costs included in the projected FY28 structural deficit?

7. Would the bills require reductions elsewhere in the budget?

8. Why does the MCPS credit have no apparent income limit?

9. Why are retired teachers excluded from the MCPS credit?

10. Who receives assistance and who is left to pick up the tab?

One question every resident should ask is: How can the County responsibly approve additional tax credits while facing a nearly $293 million structural deficit unless the Council clearly explains what these proposals will cost, how they will be funded and who will ultimately pay?