By Michael Phillips | MDBayNews
ROCKVILLE — Roughly four months after voting to zero out a property tax credit available to eligible owner-occupied homes regardless of income, the Montgomery County Council introduced three narrower tax-relief proposals Tuesday.
The bills went before the full council at its Tuesday session, the first since a seven-week summer recess. All three were introduced by Councilmember Kate Stewart, who chairs the council’s Government Operations and Fiscal Policy Committee, alongside various colleagues.
- Bill 46-26, a county grant supplementing Maryland’s new child tax credit, would pay $500 per qualifying child to families with income below $15,000, reduced by 10% for every $1,000 above that line. It covers children under 6 and qualifying children with disabilities up to age 17. The $15,000 threshold isn’t a number Stewart and Evans chose locally; the sponsors say state enabling law sets that limit and the county lacks authority to raise it. The program wouldn’t start immediately either: it would apply to tax year 2027, with applications accepted after Jan. 1, 2028. Lead sponsors are Stewart and Shebra Evans, with Council President Natali Fani-González, Andrew Friedson and Vice President Marilyn Balcombe as cosponsors.
- Bill 47-26 would raise the income ceiling for the county’s supplement to the state Homeowners’ Property Tax Credit from $75,000 to $106,800. For the newly eligible income band, the formula becomes progressively less generous: it uses a 25% allowable-income factor for income up to $90,000 and a 50% factor above $90,000 through $106,800, so new enrollees get smaller benefits than homeowners who already qualified. Lead sponsors are Stewart, Friedson, Sidney Katz and Evans, with Fani-González, Dawn Luedtke and Balcombe as cosponsors.
- Bill 48-26 would create a property tax credit, up to $2,500, for Montgomery County Public Schools employees who own and occupy their homes. Stewart is the lead sponsor; Evans, Katz, Friedson, Luedtke and Kristin Mink are cosponsors.
Public hearings on all three bills are scheduled for Oct. 13.
The fine print narrows each proposal further than the headline numbers suggest. Bill 48-26’s school-employee credit is narrower than “MCPS employees” implies: eligibility is limited to members of the Montgomery County Education Association or SEIU Local 500 bargaining units, and specifically excludes the superintendent, associate superintendents, principals and other central-office administrators. The employee must own the home and use it as a primary residence for at least nine months of the tax year, and if two eligible employees share a household, only one credit applies per property. Montgomery wouldn’t be the first Maryland county to try this: state lawmakers authorized Prince George’s County to offer a similar credit to its own school employees back in 2024.
Stewart framed the package as a push toward what she called “an equitable, progressive tax system that benefits members of our community,” and said she wants relief targeted at people who need it most.
Not everyone is convinced targeted credits solve the county’s underlying money problem. Kirsten Williams, a board member of the Greater Capital Area Association of Realtors, told Fox 5 DC the credits help at the margins but won’t do much until “our county really addresses the structural issues with the budget deficits.” Every little bit helps, she said, but the deeper fiscal problem remains. None of the three bills carries a completed fiscal-impact estimate yet.
“None of the three bills carries a completed fiscal-impact estimate yet.”
The credit the council already took away
The new proposals arrive against the backdrop of a bigger decision the council made in May. Facing County Executive Marc Elrich’s proposed 6.3-cent-per-$100 property tax rate increase for the fiscal 2027 budget, roughly a 6.1% rate increase, the council instead voted to zero out the Income Tax Offset Credit, a flat $692 break available to eligible owner-occupied homes regardless of household income. (State law required a Homestead Tax Credit application on file to qualify, so it wasn’t automatic for literally every property in the county, but it wasn’t means-tested either.) The move was projected to raise roughly $137 million, compared with the $164 million Elrich’s rate increase would have generated for schools.
The path the council chose left commercial property untouched. Elrich’s rejected rate increase would have applied to both residential and commercial owners; the ITOC’s elimination falls on homeowners alone. Council President Fani-González, who has defended the decision, argued the old credit didn’t discriminate by income. “Having a program where even the wealthy could qualify was not okay,” she said.
Elrich, who opposed scrapping the credit, called the swap a tax increase by another name, and his office published a breakdown of why. Because the ITOC was a flat dollar amount rather than a percentage, losing it hits modest homes harder in relative terms than expensive ones. His office calculated that for a home assessed at $650,000, roughly the county average, losing the credit works out to the equivalent of a 10.6-cent property tax rate increase. For an $800,000 home, it’s about 8.7 cents. For a $2 million home, it’s only about 3.5 cents. By Elrich’s count, 88% of county homeowners own property worth less than $1.09 million, meaning for most homeowners, the ITOC’s elimination cost more than the rate increase he had proposed instead.
“For most homeowners, the ITOC’s elimination cost more than the rate increase Elrich had proposed instead.”
It’s worth noting the ITOC repeal wasn’t the whole story of that budget. The same May package also restructured county income tax brackets, and the council’s own framing is that 95% of taxpayers will pay less county income tax under the new brackets, even as homeowners who previously received the ITOC lose the $692 property-tax credit. Those are two different line items on a household’s ledger, so this isn’t a claim that most residents came out ahead on net.
So the same council that spent the spring zeroing out a broad-based credit is now spending the fall adding credits available to narrower groups: a lower-income tier of homeowners, school employees who belong to specific unions, and low-income parents with young or disabled children. Households that don’t fit any of the three new categories, and whose income sits above the old ITOC’s income-blind reach, get nothing back from either the property tax side or these new bills.
“The same council that spent the spring zeroing out a broad-based credit is now spending the fall adding credits available to narrower groups.”
The deficit behind the debate
Kirsten Williams’ comment about “structural issues with the budget deficits” points to a real and growing number. County budget analysts projected in December 2025 that roughly $854 million less in revenue would be available over the following six years than previously forecast, driven by declining property and income tax collections, a shrinking federal workforce and slower construction activity. By mid-May, when the council was finalizing its FY2027 budget, two councilmembers put a harder figure on where that trend leaves the county the following year. Councilmember Luedtke said the approved budget “grows our projected structural deficit to $293 million,” meaning the county will be that much short in fiscal 2028 just to maintain current spending. Friedson used almost the same number, saying the budget “balloons the structural deficit to nearly $300 million.”
Against that backdrop, all three new tax credits are relatively modest in scale. For scale only: the bills’ sponsor materials cite a Comptroller’s Office count of 4,949 MCPS employees who owned homes in the county in tax year 2024. Multiplying that by the $2,500 maximum produces about $12.4 million, but that is not a fiscal estimate. The actual eligible population would be smaller once bargaining-unit membership, shared households, occupancy rules, and tax-liability caps are factored in, and no fiscal note has been attached to any of the three bills yet.
“The actual eligible population would be smaller once bargaining-unit membership, shared households, occupancy rules and tax-liability caps are factored in.”
This is also not the first time the council has widened eligibility for the homeowner credit at the center of Bill 47-26. In April 2025, the council unanimously passed Bill 3-25, raising the same credit’s income ceiling from $60,000 to $75,000, its net worth limit from $200,000 to $250,000, and the assessed-value cap the credit applies to from $300,000 to $375,000. Stewart, Friedson and Katz sponsored that bill too. Read together, the two bills mean the county has raised the income cutoff for this one credit by nearly 80% in under two years, from $60,000 to $106,800. (Because the 2025 law also indexed the threshold to inflation, the county’s current published cutoff going into this year was actually $76,620, not a flat $75,000, though Bill 47-26 uses the original $75,000 statutory figure as its starting point.)
“The county has raised the income cutoff for this one credit by nearly 80% in under two years.”
The calendar
The current council’s four-year terms expire in December, and a newly elected council, chosen in November’s general election following June’s primary, will be sworn in soon after. Tuesday’s session was one of a shrinking number of meetings left for newly introduced bills to get a hearing, move through committee, and reach a final vote before that transition. Bills 47-26 and 48-26 both carry a Dec. 7, 2026 expiration date if the council doesn’t act on them by then. The tax credit package shared Tuesday’s agenda with unrelated business, including a planning board appointment the county executive has vetoed and a long-running review of the county’s solid waste disposal options.
Councilmember Will Jawando, recovering at home after a heart attack and stent placement earlier this month, was expected to participate in council meetings remotely during his recovery, according to a Sept. 7 statement from Council President Fani-González’s office; whether he did so for Tuesday’s session specifically wasn’t independently confirmed as of this writing. In any case, no vote was taken on the three tax bills Tuesday, only their introduction; votes would come later, after the Oct. 13 hearings and committee review.
What to Watch
- Whether the Oct. 13 public hearings draw the kind of pushback that followed the ITOC’s elimination, or whether narrower, means-tested credits blunt that criticism.
- Whether the council reaches final votes on the three bills before the current council’s term ends, particularly Bills 47-26 and 48-26, which carry a Dec. 7 expiration date if not enacted by then.
- Whether a fiscal note eventually puts a real cost on the three credits, a number that hasn’t surfaced yet, against a projected $293 million structural deficit heading into fiscal 2028.
Sourcing: This report draws on a Montgomery County government press release dated Sept. 14, 2026, previewing the Sept. 15 council session, which provided the bill numbers, official bill titles, sponsor lists, hearing dates, and summary language for Bills 46-26, 47-26 and 48-26, including the exact 25%/50% income-tier language for Bill 47-26. Additional detail on bill mechanics, including Bill 46-26’s phase-down formula and effective date, Bill 48-26’s union, occupancy and one-credit-per-household restrictions, and the 4,949 MCPS-homeowner figure, comes from a review of the bills’ Council packet materials; those specific figures were not independently confirmed by this outlet against the underlying PDFs, which are not accessible to automated tools. WTOP’s Sept. 15, 2026 report on the council’s post-recess agenda and The Baltimore Banner’s Sept. 12, 2026 report were also used, including quotes from Kate Stewart and Kirsten Williams. Background on the Income Tax Offset Credit’s elimination, including the distributional breakdown by home value, is drawn from Montgomery County government statements published under County Executive Marc Elrich’s office. The county’s income tax restructuring and the 95% figure come from the County Council’s own FY2027 budget summary. Structural deficit figures are drawn from WTOP and WJLA reporting on the county’s December 2025 six-year fiscal forecast, and from public statements by Councilmembers Dawn Luedtke and Andrew Friedson published on the county’s website in May 2026. Details on Bill 3-25’s 2025 passage come from a Montgomery County Council press release dated April 1, 2025. Jawando’s remote-participation plan is drawn from a Sept. 7, 2026 Bethesda Magazine report quoting Council President Fani-González’s office. Montgomery County Department of Finance pages on the Income Tax Offset Credit and the Supplemental Homeowners Property Tax Credit were used to confirm program mechanics, including the current CPI-adjusted $76,620 income threshold, $383,100 assessed-value figure, and $255,400 net-worth threshold. The Prince George’s County precedent for Bill 48-26 is drawn from Maryland General Assembly bill SB0191 (2024); this outlet confirmed the state authorization but did not independently confirm Prince George’s County has since implemented the credit.
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