Caroline County commissioners on March 18 reviewed department capital and operating requests for fiscal year 2026 and identified roughly $7.3 million available for capital purchases against about $10.4 million in requests, leaving an approximate $3.1 million shortfall that will require cuts, reallocation or new revenue.

County Administrator Kathleen Freeman and finance staff told the board that the capital starting point combines transfer tax receipts and a capital allocation from the general fund. ‘‘Right now, we're starting with about $6,500,000 as the starting point,’’ staff said, and adding transfer tax brought the working total to about $7.3 million; current capital requests total roughly $10.4 million.

The shortfall led commissioners and staff to mark a number of items for further review or delay. Commissioner Jay Travis Breeding and Commissioner Franklin Bartz said early they did not expect funding for two circuit court items — a parking-lot expansion and ballistic windows — this year because of tight funds. Commissioners instructed staff to proceed through departmental lists, prioritize items and return with recommendations for trims and placeholders.

Why this matters: the workshop lays out funding choices that will shape the county’s operating budget, capital program and plans for road resurfacing, buildings and vehicles. Several state-level proposals and revenue uncertainties complicate the county’s work: staff cited a proposed change to state income tax treatment and the potential for “cost shifts” from the state that could increase county obligations during FY26.

Major items and staff recommendations
- Capital funding and requests: staff reported about $7.3 million available versus $10.4 million requested; commissioners were asked to identify priorities, potential cuts and placeholders. Staff recommended keeping options flexible because state budget actions could change the county’s position.
- Corrections: staff said a courthouse control panel in poor condition will be funded from previously earmarked unspent capital; a second request, a transport van, will be inspected by an outside shop before a replacement decision. Staff reported a vehicle surplus fund balance of about $569,000 that could be used for urgent replacements.
- Emergency Medical Services (DES): staff said 14 cardiac monitors will be funded from the BLS (transport) fund; commissioners were told the fund receives roughly $1.4M a year in transfers and has a meaningful balance. Vehicle replacements for an EMS lieutenant and a division chief remain on the request list but were not advanced as immediate general-fund asks.
- Facilities and equipment: staff provided a prioritized list of facilities projects; commissioners said they were generally comfortable with funding through priority 7 but wanted site visits before final approval. Several equipment requests (including a 6-wheel dump truck, a commercial zero-turn mower and other items) were proposed to be paid from the county’s surplus equipment fund rather than the general capital allocation.
- Roads/infrastructure: Commissioners discussed balancing hot-mix asphalt overlays and tar-and-chip work. Because a large portion of remaining capital (about $3.5M) sits in road projects, the board said they would likely use the hot-mix line item to balance toward a final capital number but wanted to leave it flexible pending operating budget decisions.
- Chesapeake College: the college has requested funding for a multi-year Finance/Technical building. Caroline County’s full share would be about $2.7 million; the college is seeking roughly $180,000 in year one from the county. Commissioners agreed to keep a full-cost placeholder in the FY26 plan so the county would not be forced into deeper cuts in FY27–28 if the state funds the project and the county is committed to a share.
- Local school projects: commissioners supported local shares for two Board of Education projects — a chiller at Denton Elementary and planning/design work for Lockerbie Middle School — because state funds would pay the large majority of each project.

Pensions, state grants and revenue risk
Staff emphasized that state-level proposals could materially change the county’s revenue and expense picture before final adoption. Two items were singled out:
- Income tax and state “cost shifts”: staff inserted a $1.1 million reduction to FY26 income-tax receipts in the working numbers to reflect a governor-recommended change in state tax treatment; commissioners noted ongoing uncertainty as the General Assembly continues work.
- Teacher retirement and disparity grant changes: staff warned that proposed changes (including proposals in bills discussed this session) could shift additional teacher retirement costs to counties and reduce the state disparity grants that currently offset part of that cost; one scenario discussed would increase county costs by several hundred thousand dollars if the state phases out supplements.

Public-safety and nonprofit funding questions
Commissioners discussed fire-company allocations and other nonprofit requests. Fire companies asked for a 10 percent increase; commissioners were split (some preferring 5 percent), and the board left the question open pending further review. Commissioner Larry C. Porter proposed a one-cent reduction in the town differential (the tax differential towns receive) to raise an estimated $107,000 toward county needs; the idea prompted a broader discussion of the towns’ services and the differential’s purpose but no final decision.

Decisions and directions from the workshop
- Staff was directed to inspect the corrections transport van at an independent shop and return with findings.
- The detention control panel will be funded from existing capital earmarks and moved forward.
- Cardiac monitor replacements for EMS were approved to be funded from the BLS transport fund per staff recommendation.
- Several equipment items (including a K-9 patrol vehicle upfit) were noted as candidates to be funded from the surplus equipment fund pending final confirmation; commissioners signaled support for using surplus funds for these replacements.
- Commissioners left Chesapeake College’s full funding request in the FY26 plan as a placeholder, with agreement that the funds could be reallocated if the college project does not proceed.

Next steps: staff will update the operating and capital worksheets, circulate a consolidated version showing the commissioners’ differing placeholders, and schedule follow-up workshops. The board must advertise a proposed ("0-based") budget in advance of the April–May public hearing schedule; staff noted timing pressure because the state budget process may continue into early April.

Quotes and attributions are limited to speakers identified in the meeting record; staff and commissioners repeatedly stressed that the numbers were “fluid” and that the board would revisit priorities as state actions and updated revenue projections arrive.