Montgomery County homeowners who work for the public school system could get a $2,500 annual property tax credit under a bill now before the council. The price tag: $25 million to $30 million a year in lost revenue.

The fiscal impact statement for Bill 48-26, released Oct. 27, found that between 11,000 and 12,000 Montgomery County Public Schools (MCPS) employees could qualify. Nearly all live in homes assessed high enough to receive the full $2,500 credit, according to the statement. Processing up to 12,000 applications each year would also require a new accountant position costing $137,133 annually, as first reported by Montgomery Perspective.

The bill, introduced Sept. 15 by Councilmember Kate Stewart, has six co-sponsors: Councilmembers Andrew Friedson, Sidney Katz, Dawn Luedtke, Kristin Mink, Laurie-Anne Sayles and Shebra Evans. That gives it majority support on the 11-member council.

Who qualifies

Eligible employees must own and occupy a home in Montgomery County and belong to the bargaining units of the Montgomery County Education Association (MCEA) or Service Employees International Union (SEIU) Local 500. Teachers, cafeteria workers and bus drivers would be covered. Superintendents, principals, directors and other high-ranking administrators would not, according to council records.

The county already offers the same $2,500 credit to certain first responders, MCM reported. If passed, MCPS employees would begin applying July 1, 2027, according to WUSA9.

Deficit backdrop

The cost estimate lands as the county confronts a $293 million structural deficit, a figure Montgomery Perspective's Adam Pagnucco attributed to the council's spring operating budget. A separate county fiscal report projected $134 million in agency cuts because revenues were not keeping up with spending, Pagnucco reported.

Those budget pressures followed the council's 6-5 vote in May to adopt a progressive income tax structure and eliminate the $692 Income Tax Offset Credit (ITOC) for one year, Bethesda Magazine reported. That one-year elimination raised property tax bills for qualifying homeowners across the county.

Criticism

Nora Gordon, a Georgetown University public policy professor and MCPS parent from Chevy Chase, called the credit "not a strategic use of the County's scarce resources" in a guest column on Moderately MoCo published Oct. 9. Gordon wrote that the bill "most distressingly … forces the question of how elected officials balance all of their constituents' interests, not just those of the policy's powerful beneficiaries."

At an Oct. 13 public hearing, Esther Wells, the Republican nominee for county executive, described the tax credit package as "a wealth transfer" to help fund organizations that endorse council members, according to Bethesda Magazine.

Representatives of the Montgomery County Taxpayers League and the Greater Capital Area Association of Realtors (GCAAR) also argued the bills do not go far enough on affordability. GCAAR representative Eric Smith said at the hearing that removing the ITOC "takes us backwards," Bethesda Magazine reported.

Supporters push back

Stewart framed the bill as part of a broader affordability effort. She said it responds to educators leaving the profession or moving out of the county, in part because of housing costs, MCM reported in September.

Tamara Kelly, an MCPS administrative secretary and SEIU Local 500 member, said at Stewart's Oct. 13 press conference that she and her partner rely on both incomes "just to cover the basics," according to Bethesda Magazine.

"Being a homeowner doesn't mean you're wealthy, and working in public education shouldn't mean struggling to afford the community you serve," Kelly said.

What's next

The council's Government Operations and Fiscal Policy Committee, which Stewart chairs, is scheduled to review the bill Thursday, Oct. 29. If the committee advances it, the full council would take a final vote. The bill expires Dec. 7.