Montgomery County Council President Kate Stewart announced a plan that would cover nearly all of the $3.6 billion requested by the county school system in its 2026 budget while avoiding a tax hike.
At a news conference Tuesday, Stewart said the council has agreed to tap into an employee retirement benefit fund on a one-time basis to cover 99.8% of what the school system has requested in its spending plan for the next fiscal year.
“I’m going to be honest, this is not a plan, during normal times, I would have advocated for,” she said.
Stewart said the plan allows the school system to receive a total of $50 million from the employee benefits fund — $25 million from fiscal year 2025 and $25 million from fiscal year 2026 — to help plug a hole in the school system’s budget.
“We are not facing normal times right now,” she added, referring to budget pressures from federal and state governments. “There are so many challenges we have, and we need to plan for the future as we are also budgeting for today.”
County Board of Education President Julie Yang told Stewart, “You have approached this budget with courage, collaboration and creativity.”
“Funding our school system is never just a budget decision. It’s a value decision. It is a declaration that every student deserves a chance, that public school is the foundation of a thriving and unified Montgomery County,” Yang added.
Superintendent Thomas Taylor said one of the biggest issues in the budget plan was the need to “fill a hole in the employee benefits plan that had fallen into deficit.”
“Now, I will say that it’s never a good time to use one-time funds for an ongoing expense — unless it is a genuine emergency,” Taylor said.
Taylor said the move now allows the school system and the county council to work on long-term solutions.
David Stein, president of the Montgomery County Education Association, told WTOP that in the long term, “we need to find a more stable funding solution,” but that the maneuver helps avoid what he called “catastrophic” cuts to the school’s proposed budget.
Stein said the proposed school budget focuses on special education, including boosting “the number of supports that we have for our special education students.”
Stein also said the budget contains more funding for school security and teacher pay, “so that we can retain and recruit the very best educators.”
In a statement, Jawando, who was not present at the news conference on Tuesday, agreed with Stewart and Taylor that the strategy of dipping into employee benefit funding is not sustainable.
“By next year, we should have a clearer picture of our fiscal outlook — including any impacts from federal policy or tax changes,” Jawando wrote. “And I hope the Council will seize that opportunity to take more durable steps to prioritize our students and schools.”
Montgomery County Executive Marc Elrich initially proposed a property tax increase, then scrapped that in favor of boosting the county’s income tax rate from 3.2% to 3.3% to fund the school system’s budget request.
In a statement to WTOP, Scott Peterson, a spokesperson for Elrich, said, “The County Executive supports this proposal. He has previously proposed using the OPEB funding for MCPS, and the Council had not been receptive of this method. He is pleased that they came around on this idea.”
The income tax resolution is on the agenda for the council’s Wednesday meeting.
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