FY 26 Approved Operating Budget

HARFORD COUNTY MARYLAND FISCAL YEAR 2025 BUDGET SUMMARY

Property Tax revenue estimates are based on a thorough analysis of lien sheet activity, deed activity, building permit data, residential sales, Transfer Tax transaction data, and Maryland State Department of Assessments and Taxation Distribution Tracking Information. Maryland State law provides that all property is subject to the property tax. Properties are reassessed by law once every three years, and property owners are notified by the Maryland State Department of Assessments and Taxation of any change in their assessment. Properties are required to be assessed at their current market value so that each property owner pays their fair share of local property taxes. In FY 26, the County is maintaining a tax rate of $0.8413. The State reassesses all properties on a triennial basis. Statewide "Group 1" reassessments for FY 25 increased by 20.1% over the past three years according to the State Department of Assessments and Taxation. In Harford County, assessments in Group 1, which mainly covers the southern area of the County, grew by 19.8% with residential and commercial assessments increasing by 20.3% and 15.0% respectively.

Income Taxes FY 26 Approved Budget FY 25 Approved Budget

342,000,000 32.90% of the Total All Funds FY 26 Operating Budget 317,325,000 32.54% of the Total All Funds FY 25 Operating Budget

$ Increase % Increase

24,675,000

7.78%

Income Tax is calculated in Maryland as a percentage of net taxable income. While the State sets a tax rate cap of 3.2% for local governments, the Harford County Council has set an income tax rate at 3.06%. The State Comptroller's Office administers and collects the tax and distributes the receipts to the counties and municipalities. Harford County receives approximately 90% of income tax in quarterly distributions of the withholdings and estimated payments. The county is expecting modest growth in income tax for FY 26 over the revised FY 25 estimate as the economy is expected to cool with the possibility of entering a mild recession. FY 25 income tax is estimated at $340.5 million, which is $23,175,000 million over the adopted budget. FY 21 through FY 23 experienced significantly strong income tax growth, some of which was most likely one-time revenue brought forth by Federal stimulus funding. The FY 24 income tax was seen as a resetting of the base in a post-pandemic economy. In light of national and state uncertainty, the Spending Affordability Advisory Committee projects growth of 6.15% or $44.4 million in the Net Adjusted General Fund Budget from FY 25 to FY 26. However, it should be stated that this is a budget to budget growth and this projection is more relative to changing the baseline, as opposed to actual revenue growth.

Recordation Tax FY 26 Approved Budget FY 25 Approved Budget

16,085,000 1.55% of the Total All Funds FY 26 Operating Budget 14,835,000 1.52% of the Total All Funds FY 25 Operating Budget

$ Decrease % Decrease

1,250,000

8.43%

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