Montgomery County Executive Marc Elrich Releases Recommended FY26 Capital Budget and Amendments to the FY25-30 Capital Improvements Program (CIP)

This is the biennial, or second year, of the capital improvements program. As a result, amendments are limited to project changes that either meet the County’s CIP amendment criteria or that are necessary to address capital or operating budget constraints.

Amendment criteria in the biennial year include urgent or time sensitive project changes such as adjustments needed to address an urgent health or safety concern, opportunities to leverage significant non-County funding, significant economic development initiatives and opportunities to achieve significant savings or cost avoidance.

The complete recommended FY26 Capital Budget and amended FY25-30 Capital Improvements Program is available online.  

“My FY26 CIP amendment recommendations continue to progress on important projects to advance critical policy goals, including education, economic development, transportation and core infrastructure, with limited disruption to previously approved projects despite constrained resources and growing cost pressures,” said County Executive Elrich. “This CIP was not developed without difficult decisions. Some projects are deferred, and I am painfully aware that, without more funding, we are limited in our ability to solve local problems and build the kind of healthy, just, sustainable and economically vibrant community we want for our residents.” 

County Executive Recommended FY26 Capital Budget and Amendments to the FY25-30 CIP $5.852 Billion ($000s)

Cost Pressures

• Construction Cost Increases Related to:
  • Inflation
  • Tight construction market
  • Labor shortages
• Higher bids erode buying power.
• Project amendments required to maintain core infrastructure and operations also add to cost pressure.

General Obligation Bond Spending Affordability Guidelines

• $1.68 billion in General Obligation bond issuances over the next six years.
• Maintains constrained General Obligation (GO) bond debt levels planned for issuance over the six-year period, aligned with the limits approved by the County Council.
• The County Executive accepts the Council’s constraints but urges them to reconsider the limits.
• It is in the best interests of the County’s future to increase the limits to allow investments in infrastructure to spur robust economic growth. The chart below shows the loss in buying power over time given the flat funding of the bond issuances.

CIP Recommendations 

$1.74 billion for Montgomery County Public Schools (MCPS) capital projects  

Photo of Charles W. Woodward High School (courtesy of: Montgomery County Public Schools)

• Holds capacity to fully fund the $1.85 billion previously approved CIP as it reflects:
  • $1.74 billion recommended for Montgomery County Public Schools (MCPS) capital projects in the six-year period.
  • More than $98 million in spending on MCPS projects that occurred ahead of schedule and will no longer occur in the FY25-30 period. 
• The Charles W. Woodward High School reopening project:
  • MCPS’s net State aid shortfall is estimated to be $15.5 million, though the final State aid allocation is unlikely to be known until after final Council action is taken on the FY26 Capital Budget in May.
  • The recommended CIP holds capacity for this net shortfall so that local resources can be appropriated to the project once the true State aid deficit is known.  
• MCPS enhancements include:
  • Charles W. Woodward (North Bethesda) – $28 million to complete the interior of the auditorium and associated spaces.
  • Crown High School (Gaithersburg) – $20 million to complete the interior of the auditorium, shelled classrooms and labs and construct the originally planned stadium of the new school/new facility.
  • Northwood High School (Silver Spring) – $5 million for stadium upgrades.
  • HVAC – $4.5 million to address backlogs.

$410 Million for Montgomery College

Photo of Montgomery County College – Rockville Campus (courtesy of: Montgomery County College)

• Fully funds the Montgomery College CIP projects, providing a net increase of $12.4 million, or 3.1 percent, increase over the prior CIP.
• Adds funds to support state allowable escalation adjustments.
• Allocates contributions from fund balance to support enhancements to the Capital Renewal: College and Planned Lifecycle Asset Replacement: College projects.
• Leverages $118.9 million in State aid.

“My budget proudly incorporates several projects as having the potential to advance racial equity and reduce disparities in the County, which has been a signature policy priority of mine since assuming office,” said County Executive Elrich. “However, racial equity is one of many factors that must be considered and weighed in assembling a capital budget plan. Some projects required to sustain County services are critical to complete though they may not reduce racial disparities.” 

To create a more equitable and inclusive County, a racial equity lens was incorporated into the development of FY26 Capital Budget and Amendments to the FY25-30 CIP. The Office of Racial Equity and Social Justice (ORESJ), in partnership with the Office of Management and Budget, implemented a Capital Budget Equity Tool (CBET) to encourage departments and decision-makers to consider the impacts of proposed projects on racial disparities and inequities in the County.  

The CBET provides a structured approach for identifying, analyzing and interpreting data about historical and current racial disparities and inequities in the County. Departments can use the information collected to adjust their project planning, design or outreach and decision-makers can assess budgets based on their ability to advance priority initiatives such as racial equity and social justice. 

Projects were strategically selected for assessment to maximize the impact of this work, targeting new projects and existing projects with scope or cost changes unrelated to inflation or technical adjustments. Level-of-effort projects were not assessed. Responses to the CBET were assessed by ORESJ using a defined methodology, which resulted in a finding statement and narrative justification. Decision-makers considered the analysis as part of the budget decision-making process. 

This recommended CIP accelerates funding for the White Oak Science Gateway Redevelopment project and supports cost increases and facility assessments for the Recreation Facilities Refurbishment-Centers projects which are identified by the CBET as projects that advance equitable outcomes designed to reduce existing racial disparities and inequalities. In addition, the recommended amendments maintain funding for a number of important projects with the potential to reduce racial disparities and inequities as identified by ORESJ’s CBET in past years including: 

• Bus Rapid Transit on MD 355 and Veirs Mill Road
• Cherry Hill Road Bike Facility
• Dale Drive Shared Use Path and Safety Improvements
• MD 198 Sidewalk Improvements
• Norwood Road Shared Use Path
• Revitalization for Troubled and Distressed Common Ownership Communities
• School Based Health Centers and Linkages to Learning Centers
• U.S. 29 Streetlighting
• Wheaton Headquarters Retail