Brian Kelly, chair of Harford County's Spending Affordability Committee, told the County Council on May 1 that the committee's models project the county's net adjusted general fund budget to grow about 6.15 percent for the coming year, equal to roughly $44 million above fiscal year 2025's budget. He said a smoothed modeling approach that blends long-term averages with regression banding was used to avoid overreacting to one-year spikes and troughs.

The report said that while headline growth looks strong, the committee's smoothing reduces the chance that the county will chase short-term highs or lows. Kelly said the committee's work produced a figure that, on a true year-over-year basis, is closer to 2.9 percent growth and that property tax receipts were the most consistent revenue driver. "Our income tax revenue streams are the least predictable," Kelly said, citing state-level reconciliation payments and earlier market volatility.

The committee credited strong reassessment results for much of the upside: Kelly noted reassessment groups had shown large percent increases this cycle (Group 1 about 19.8 percent, a 2025 group roughly 22 percent, and Group 2 about 16 percent) and said those assessment changes materially raised the property tax baseline. Council members and staff clarified that the reassessments are phased over multiple years and that primary residential properties remain subject to a 5 percent cap.

But council members pressed the committee on fund balance and reserves. Council members noted the county's stated goal of a reserve equal to 5 percent of the budget plus $20 million; committee members and staff replied the forecasted position a year out would likely be nearer to 5 percent plus $6.7 million unless revenue assumptions change. Committee members emphasized they prefer more reserves given uncertainty, but that the county has been reducing the structural gap: Kelly and staff traced the county's assigned fund balance from about $74 million in fiscal 2024 toward lower amounts in later years as one-time balances were used.

Several council members and the committee discussed downside risks: a possible federal workforce reduction, sensitivity of Maryland's income tax distributions to high-income filers and reconciliations, and general macroeconomic volatility including tariffs and interest-rate effects on consumer demand. The committee said it had adopted a conservative band in its models for FY26 because downside risk currently predominates.

The presentation also noted other long-term indicators: the county has a AAA bond rating, debt ratios that staff characterized as reasonable, and a shift in the county's growth paradigm from rapid building-era growth to a more mature economy.

Why it matters: Council members must set a balanced budget that funds schools, public safety and capital projects while maintaining reserves that protect the county during downturns. The committee's forecast gives decision-makers a more conservative baseline to work from but underscores that the county still faces a multi-year structural challenge to rebuild reserves.

Kelly closed by offering to answer follow-up questions and to deliver the committee's full written report to council members.