Montgomery County’s Draft Annapolis Wish List Asks for a Local Sales Tax and Split Property Tax Rates

Montgomery County’s draft list of requests for the 2027 Maryland General Assembly session asks state lawmakers for the power to levy a local sales tax and to set different property tax rates for commercial, industrial and residential property. The draft, which the packet calls County Executive Marc Elrich’s recommended priorities, goes before the Montgomery County Council on Tuesday, Oct. 27, at 2 p.m. (Council packet, Agenda Item #10, pages 1 to 5).

The draft also asks for more flexibility on local income tax rates and a new exception to the County Charter’s property tax limit.

The tax requests: new specifics, partly repeated

The county’s Office of Intergovernmental Relations (OIR), which wrote the draft, marks each line: regular type repeats the 2026 document, underlined text is “similar to language included in last year’s document,” and italic text “is new” (page 3).

The sales tax, property tax and income tax requests share one underlined bullet, which means OIR treats them as a revision of a 2026 request. The county’s 2026 priorities asked only for “increased options to generate revenue for local investment,” without naming a tax. OIR’s margin note on the 2027 version says “the language lists key examples of new revenue generating mechanisms supported by the County Executive” (page 5).

The draft’s Charter request is in italics, marking it as new: flexibility on Charter property tax limits “beyond the current exception applying to primary and secondary education funding” (page 5).

How the tax rules work now

• One property tax rate. Maryland law says “there shall be a single county property tax rate for all real property subject to county property tax,” with narrow exceptions (Tax-Property Article § 6-302). Thirteen Maryland municipalities already set special rates for some property classes, according to a Department of Legislative Services (DLS) presentation (slide 2). Bills in 2025 and 2026 would have let counties set a special commercial property rate of up to 12.5 cents per $100 of assessed value, DLS told a state task force (slide 5).
• Income tax. State law requires every county’s income tax rate to be between 2.25% and 3.3%, according to DLS (slide 9). The Council adopted “a progressive income tax structure” for fiscal 2027 in May, a county release said.
• Sales tax. Maryland local governments “only have the power to tax if authorized by the General Assembly,” DLS says (slide 1). MDBayNews reported Sept. 16 that county officials were seeking “the power to reach new bases, like sales activity or land value, that the General Assembly has not yet opened up to them.”
• Charter limit. Montgomery’s Charter bars the weighted real property tax rate from rising above the previous year’s unless all councilmembers vote to override the limit, according to a DLS guide (page 49). State law already lets a county go over a charter limit “for the sole purpose of funding the approved budget of the county board” of education (Education Article § 5-104(d)).

A state Task Force to Modernize County and Municipal Revenue Structures must report its recommendations by Dec. 1 (Chapter 17 of 2026). Elrich “called for differential property tax authority and more flexibility in local income taxes” at the task force’s Sept. 14 hearing, the Maryland Association of Counties’ Conduit Street blog reported. The Baltimore Sun’s hearing story was subtitled “Taxes task force highlights sharp divide between local leaders and businesses.” Moderately MOCO reported Oct. 13 on a food and beverage tax the task force is weighing.

Every other policy request in the draft

• Housing: enabling authority for a local “just cause” or “good cause” eviction law (repeated from 2026; a similar request appears in the 2025 priorities); statewide housing strategies covering market-rate and affordable units (revised); rental assistance for unhoused residents (revised).
• Education: keep the state’s commitment to the Blueprint for Maryland’s Future (revised); more state money for school construction (repeated); child care scholarship funding, provider pay at 70% of the cost of care and a provider registry (revised).
• Federal challenges (both new): support the Maryland Attorney General’s legal challenges to federal executive orders and funding freezes; oppose federal rule changes to grant guidance and the 2030 Census.
• Climate and environment: clean energy and electric vehicle support (repeated); state minimum standards for data centers with flexibility for local policies (revised); water quality, waste and flood resilience (repeated).
• Economic development: retool state programs toward targeted industries and small businesses (revised); direct state investment in the county (new); tax increment financing legislation (new).
• Transportation: new transportation funding mechanisms (revised); stable Metro funding (repeated); an American Legion Bridge funding plan (new); criteria-based project selection (new); zero-emission vehicles (new); Vision Zero safety (repeated).
• Health and human services: funding for the Developmental Disabilities Administration (revised); an annual state minimum wage adjustment tied to the Consumer Price Index (new).
• Local autonomy: keep existing local authority, including land use and zoning; oppose bills that burden county government (both repeated).

The capital requests

The draft seeks state money for 19 capital projects totaling about $190.2 million, by Moderately MOCO’s count (pages 6 to 7):

• Montgomery County Public Schools construction, $85 million (up from $49.3 million requested for 2026)
• New Ride On bus depot, $50 million (the same as 2026)
• Bethesda Metro South Entrance, $18.5 million; North Bethesda Metro northern entrance, $8.1 million
• Stormwater pond repairs, $7.2 million; Turkey Branch stream restoration, $2.9 million
• Public Safety Joint Operations Center, $3.9 million
• Homelessness and housing: modular family shelter, $3 million; medical respite facility, $2.75 million; group home preservation, $2.5 million
• Recreation center playgrounds, $1.4 million, and equipment, $764,000
• MD 198 path in Burtonsville, $1.57 million; Georgia Avenue streetlights, $675,000; Germantown Road streetlights, $350,000; Martin Lane path in Wheaton, $250,000
• Germantown dental clinic consolidation, $588,309; Progress Place security, $500,000; Clara Barton Daycare renovation, $224,844

The draft also backs eight projects totaling about $56.1 million that the state preauthorized in 2026, led by $32.4 million for a Montgomery College Germantown student services center and $15 million for White Oak redevelopment (pages 7 to 8).

What happens Tuesday and after

• Oct. 27, 2 p.m.: The Council holds a worksession on the draft, with a straw vote expected, and can ask OIR for revisions (agenda; packet page 1). The session streams online, on YouTube and Facebook, and on County Cable 6, according to the Council’s viewing page.
• Nov. 10: A revised joint Council-Executive letter goes on the Council’s consent calendar for final approval (packet page 1).
• Nov. 16, 7 p.m.: The Montgomery County Delegation holds its Joint Legislative Priorities Hearing, with sign-up to testify, according to the Delegation’s calendar. The Delegation lists local and bi-county bill hearings on Nov. 30 in Wheaton and on Dec. 17.

Still unanswered

• Did the sales tax request originate with the County Executive, and does the Council support it?
• What sales tax rate or structure, if any, does the county have in mind?
• How would differential property tax rates change bills for homeowners compared with commercial owners?

We have not yet put these questions to the Office of Intergovernmental Relations; this story will be updated with any response.

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