General Fund

General Fund Revenues

• The General Fund is supported by various revenue sources, including different taxes, licenses, permit fees, and charges for using county facilities.
• Over 90% of total recurring revenues come from two sources - property taxes paid by County residential and commercial property owners and income taxes paid by County residents.
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General Fund Revenue Trend

• Fiscal 2026 projected revenue growth of 4.9% (excluding use of fund balance) represents a slowdown from the unusually high growth in the early Covid-period driven by one-time unsustainable factors (such as federal stimulus and tax rate adjustment) but slightly higher than pre-Covid average growth of 3.5% to 4.0% per year.
• Fiscal 2026 revenue outlook features high uncertainty and exceptional risks due to potential impacts from new federal policies such as workforce downsizing, funding cuts, and tariffs.
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General Fund Expenditures

• Education, encompassing the Howard County Public School System (HCPSS), library, and community college, is a top priority for Howard County, taking up nearly two-thirds of the General Fund budget. The Fiscal 2026 budget allocates $814.5 million to HCPSS, $53.8 million above the State Maintenance of Efforts level, plus $1.5 million for one-time expenses. This marks the highest annual growth in county funding to HCPSS in history.
• County funding for education is over five times higher than that for public safety, the second largest expenditure. Total spending on HCPSS comprises 56.6% of the Fiscal 2026 County General Fund budget. This includes direct appropriation to HCPSS (52.2%), as well as other payments (4.2%) for teachers’ pensions, school staff OPEB (retiree health benefits), and school capital projects debt payment.
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• As a full-service county, Howard County faces a growing and competing demand for various public services. Notably, the population of residents aged 65 and older is rapidly increasing, representing the fastest-growing demographic group. Service costs also grow due to employee pay/benefits and long-term liabilities, such as debt payments, pensions, and retiree health benefits.
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• Direct county funding for HCPSS has increased by approximately 30% over the past five years, despite a reduction in student enrollment during this period. HCPSS enrollment has decreased since its peak in the 2019-2020 school year and is projected by HCPSS to remain stable over the next decade.
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General Fund Long-Term Outlook

• According to the Fiscal 2026 Spending Affordability Advisory Committee (SAAC) report, the county's annual deficit between ongoing revenue and expenditures is anticipated to range between $88 million and $338 million, in the absence of any gap-closing strategies. “Without corrective action, the cumulative deficit could exceed $1.2 billion by FY 2031.”
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• The structural gap is due to several factors such as expenditure growth outpacing revenue growth, driven by rising service needs and costs; and slower population growth from limited developable land and less new development, reducing the county’s primary revenue sources of property and income tax.
• The County must legally balance its budget and address any funding gaps. Due to the high tax burden, additional revenue options are limited. Both the County and educational institutions need to prioritize needs and develop sustainable long-term plans based on fiscal reality.