ELLICOTT CITY, MD – Howard County Government’s Spending Affordability Advisory Committee (SAAC) released its report for the Fiscal Year (FY) 2027. A non-partisan body comprised of residents representing different disciplines and areas of expertise, as well as representation from educational entities, council staff, and executive staff, the SAAC was charged with providing policy advice to the County Executive on fiscal planning.
I’d like to thank the members of the Spending Affordability Advisory Committee for the time, effort, and insight they provide to our budget process. As we begin the process of developing our FY 2027 budget, it is pertinent that we take into consideration the SAAC’s recommendations, especially as external and internal risks threaten Howard County’s financial well-being.
During the last two months, the SAAC has been briefed by economists, financial experts, business representatives, multiple County agencies, and local educational institutions on economic outlook, revenue projects, capital needs, and operating budget requests for not only FY 2027, but also for fiscal years 2028 through 2032. In developing its report, the SAAC recognizes that revenue projections for the coming year are unusually strong; however, the Committee notes these conditions are unlikely to persist and should not be treated as a new baseline for ongoing spending. Instead, the SAAC finds that FY 2027 presents a limited opportunity for the County to strengthen its fiscal position, address structural challenges, and prepare for potential economic headwinds.
“FY2027 revenues expected to be strong, albeit unsustainably, enabling a modest spending increase and replenishment of depleted reserves,” said Todd Arterburn, SAAC Vice Chair.
The SAAC reports that FY 2027 General Fund revenues are projected to grow by 6.3 percent over the FY 2026 budget, well above the County’s historical average annual growth of 3.5 to four percent, despite the challenges caused by federal actions. The projected revenue increase in FY 2027 is driven primarily by a surge in capital gains and higher-than-anticipated reconciliation distributions from prior years’ income tax collections. This elevated growth rate is, however, not expected to continue.
Additionally, continued uncertainty in revenue forecasts due to unpredictable federal policy changes and their lagged impact on revenue poses a threat. Throughout November 2025, ongoing disruptions and changes at the federal government level have resulted in more than 15 percent reductions of Federal employees living in Maryland, according to State data. This is expected to directly impact Howard County, where more than 11 percent of employed residents were federal employees. Moreover, there are countless federal contractors and impacted workers who call Howard County home, whose livelihood was also greatly affected by the federal government shutdown and reduction in force. As residents and families struggled to make ends meet, the shutdown also impacted local businesses and economy due to reduced household spending and financial uncertainty. Howard County’s closeness to Washington, D.C. and its reliance on the federal government represents a significant risk factor to Howard County.
“Maintaining fiscal responsibility while creating the conditions for economic growth is critical,” said Kristi Simon, President and CEO of the Howard County Chamber of Commerce and SAAC Member. “The Committee’s recommendations reflect a clear understanding that we cannot simply tax or cut our way through future challenges — we must focus on growth. By strengthening reserves, prioritizing infrastructure, and advancing policies that support investment and job creation, Howard County can remain resilient and competitive even amid economic uncertainty.”
As noted in the report, a stronger County economy creates a cycle of increased revenue, increased investments, and greater desirability for businesses and residents to locate in Howard County. The report brings to life that there are limited places where the County can find new revenues, which means when there are fiscal challenges, there are only two options: raise taxes or cut programs. However, by encouraging economic growth, the County will help meet its long-term fiscal needs and provide resilience to meet future challenges with less austerity. The Committee is encouraged by the adoption of the County’s new General Plan, HoCo by Design, despite many of its suggestions not yet being implemented. To help move these suggestions along, the SAAC encourages the Howard County Council to review regulatory and permitting mandates that add time, uncertainty, and unnecessary costs, all of which could be inhibiting investment in our community.
Based on the information gathered, the SAAC recommends the County:
- Maintain FY 2027 General Fund revenues of $1.629 billion, reflecting 6.3 percent growth from the FY 2026 budget, excluding one-time resources.
- Hold the FY 2027 General Fund budget recurring expenditure growth to 4 percent and allocate the remaining 2.3 percent of the projected total 6.3 percent growth to replenish and strengthen reserves.
- Engage all stakeholders in developing a balanced budget.
- Grant new General Obligation (GO) bonds authorization of $75 million in FY 2027 and encourage continued fiscal discipline.
- Prioritize capital project spending to address deferred maintenance (including Howard County Public School System (HCPSS) and County infrastructure projects) and limit new projects that will obligate 20-year debt services payments, as well as ongoing annual funding for staffing, operating, and maintenance needs.
- The SAAC strongly recommends that Capital Improvement Plan spending be focused on tackling the deferred maintenance backlog for aging public infrastructure. The report highlights an estimated $105 million backlog in road resurfacing and $126 million in critical stormwater system maintenance and repairs, and HCPSS, which now estimates deferred maintenance at $190 million.
- Adopt a revenue projection of 3.6 percent growth, on average, during FY 2028-2032.
- Collaborate with stakeholders and develop a balanced multi-year plan with solutions to close projected structural gaps.
- Make strategic moves to “grow the pie” through economic development, including prioritizing key Howard County Economic Competitiveness and Opportunity Now (ECON) task force recommendations and implementing HoCo by Design plans.
- Make it a priority to maintain the County’s AAA credit ratings and stick to sound fiscal policy and financial practices.
Despite numerous rating downgrades across our nation, Ball announced earlier this year that Howard County has once again earned the highest possible credit rating, AAA, from all three bond rating agencies – Fitch Ratings, Moody’s Investor Services, and Standard & Poor’s. In 2026, Howard County again ranks among the top two percent of counties nationwide to earn this vote of confidence based on a stable outlook from experts. Being one of roughly 130 counties with this distinction among approximately 3,100 in the U.S. demonstrates that Howard County’s financial management is fiscally strong, trustworthy, and responsible.
Fitch cited, “Howard County's financial resilience is driven by the combination of its ‘High’ revenue control assessment and ‘Midrange’ expenditure control assessment, culminating in a ‘High Midrange’ budgetary flexibility assessment.” Additionally, “The overall strength of Howard County's demographic and economic level indicators (unemployment rate, educational attainment, median household income [MHI]) in 2024 are assessed as ‘Strongest’ on a composite basis, performing at the 95th percentile of Fitch's local government rating portfolio. This is due to relatively strong education attainment levels, median-issuer indexed adjusted MHI and unemployment rate.”
Moody’s highlighted, “The stable outlook reflects the likelihood that the county's financial position will remain healthy, supported by steady revenue growth and strong management.”
Standard & Poor’s noted, “The county is a desirable, affluent community, with a very strong economy supported by a well-educated population, wealthy property tax base, high household incomes, and direct access to the Baltimore and Washington metropolitan statistical areas (MSAs). In our opinion, these factors, along with surplus financial operations and comprehensive financial management policies and practices have allowed the county to weather economic downturns, experience good tax base and revenue growth, and underpin the ‘AAA’ rating.” Moreover, “Howard County has historically maintained steady financial performance with robust reserve levels throughout economic cycles. Conservative budgeting practices, formalized and well-adhered-to fiscal policies, active participation by the county's 22-member Spending Affordability Advisory Committee, and a well-seasoned management team are all factors that have sustained the county's sound financial position.”
The FY 2027 SAAC Report can be found online on the County’s website.