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Property tax, special districts and sales tax among options to fill gap; work group recommends framework and public buy-in

September 17, 2026 | Montgomery County, Maryland


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Property tax, special districts and sales tax among options to fill gap; work group recommends framework and public buy-in
Committee members were presented with a range of funding options analyzed against equity, predictability and sustainability.

Mr. Smith explained that a countywide property-tax increase "checks a lot of the boxes" — it is predictable, more equitable than some alternatives and would be sustainable as it grows with assessed value. He noted that targeted tax credits or means-testing could reduce burdens on lower-income households if a property-tax approach were used.

Staff also described other tools: excise tax per square footage (predictable but not equitable), tax increment financing or special taxing districts for geographically focused projects (often useful for projects like White Oak), the limits of development impact taxes (they do not scale with need), and a local sales tax that would require state permission but would be regressive. The work group cautioned that public–private partnerships are useful in niche cases but are not a countywide solution.

The group recommended starting with prioritizing existing revenue differently and, if a tax is needed, packaging a suite of named projects to give the public better clarity before asking for new revenue.

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