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Maryland’s Task Force to Modernize County and Municipal Revenue Structures discussed school-facility funding needs and possible local revenue tools at its October 2, 2026, meeting. The discussion included a reported $1.94 billion annual school-facility funding gap for FY 2026, along with retail delivery fees, a local meals tax, municipal hotel taxes and special property tax rates. These were matters under review—not adopted measures or final task force recommendations.
How large is Maryland’s reported school-facility funding gap?
The Interagency Commission on School Construction (IAC) estimates, as reported by Conduit Street on October 5, 2026, put the FY 2026 annual gap for school-facility maintenance, operations and capital renewal at $1.94 billion:
- $1.00 billion for maintenance and operations.
- $940 million for capital renewal.
The combined estimate excludes pre-K expansion, decarbonization and some other needs. It is an annual estimate for those facility categories, not a measure of all school funding needs. The underlying IAC presentation tables were not independently reviewed for this account, so these figures should be understood as estimates reported by Conduit Street.
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The same article reports an approximately $1.3 billion cumulative state school-construction funding gap for FY 2004 through FY 2027, measured against a cost-adjusted funding target. That period-total comparison is distinct from the $1.94 billion annual facilities estimate; the figures measure different things and should not be added together.
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Conduit Street’s summary of IAC figures also says school construction costs rose 210% from 2003 to 2026, compared with 82% growth in U.S. consumer prices. It reports that 42% of Maryland school facilities had used at least 60% of their expected useful life in the IAC’s 2026 report. The report identified 434 facilities needing renewal or major capital investment, 814 HVAC systems with fewer than six years remaining and 587 roofs with fewer than six years remaining. These are figures attributed to IAC through the article, not independently checked here.
What do counties contribute, and where are the tensions?
At the meeting, Donahue reportedly said counties accounted for roughly two-thirds of school capital spending over the past two decades. That figure describes school capital spending, not each county’s share of every school-related expense.
The discussion also reflected county concerns that financial responsibilities may not be matched by equivalent control over education requirements and building plans. Conduit Street cites a Worcester County agreement among IAC, the county and the school system for two replacement projects as an example of documenting project order, size and cost limits, and contribution shares.
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Howard County Government Budget Administrator Holly Sun’s September 2026 testimony said the county’s FY 2027 funding for its school system exceeded Maintenance of Effort by $53.8 million to support Blueprint implementation and critical needs. The county urged expanded local revenue authority and flexibility, while opposing use of that flexibility to fund additional state cost shifts. This is Howard County’s stated position, not a statewide measure of county spending. Read the testimony.
Which local revenue options did the task force review?
The October meeting covered several possible local revenue tools. The figures below are illustrative scenarios reported by Conduit Street, not receipts from enacted Maryland programs. For the Department of Legislative Services (DLS) revenue scenarios, the reported assumption is that every local government adopts the measure—a significant condition, not a forecast of actual participation.
| Option | Figure reported | Important qualification |
|---|---|---|
| Local retail delivery fee | About $200 million a year at 50 cents; about $300 million a year at 75 cents | DLS illustrative statewide annual estimates, assuming full local adoption. |
| Local meals tax | About $460 million a year | DLS scenario summarized in 2026 for the maximum rate in the 2025 proposal, assuming every local government adopted it. |
| Municipal hotel taxes | Not stated in the October 5 article | The task force reviewed municipal hotel-tax authority; no comparable revenue estimate is provided in the report summary. |
| Special property tax rates | Not stated in the October 5 article | The task force reviewed the option; the report summary does not give a revenue estimate. |
These scenarios cannot be compared directly with the school-facility gap as if they were available funding: they rely on different measures and assumptions, and local adoption is not assured.
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Retail delivery fees
DLS presentations, as summarized by Conduit Street, cited Colorado’s 31-cent fee in 2026–27 and Minnesota’s 50-cent fee on qualifying purchases of $100 or more under the model described in the 2026 article. The Minnesota model also has business thresholds and product exemptions.
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DLS reportedly identified statewide uniformity in Colorado and Minnesota as an administrative advantage. A Maryland local fee could raise practical questions about which jurisdiction’s rules apply to a purchase and how retailers would administer differing local requirements. The article also records concerns that a delivery fee could encourage consumers to split orders; this is a concern raised in discussion, not an established outcome.
A flat fee can take a larger share of a lower-priced purchase or a lower-income household’s budget than of a higher-priced purchase. Thresholds and exemptions can narrow which transactions are charged, but their design would determine who remains subject to the fee. DLS reportedly flagged the regressive nature of flat consumption taxes.
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Local meals tax
A 2025 Maryland proposal, SB 324/HB 997, would have permitted a local food-and-beverage tax of up to 3% on specified sales. It did not advance during the 2025 session. The approximately $460 million annual figure is a DLS scenario for the maximum rate if every local government adopted it, as summarized in 2026—not a current collection or an estimate for partial adoption.
Restaurant-sector concerns raised in debate included effects on menu prices and business costs. Those are concerns, not measured effects established by the report. As with other consumption taxes, the actual burden would depend on which sales were covered, the rate and any exemptions.
Municipal hotel taxes and special property tax rates
The task force also reviewed municipal hotel-tax authority and special property tax rates. The October 5 article’s summary does not provide revenue estimates, rate details or proposed implementation rules for these options, so they cannot be quantified or compared with the delivery-fee and meals-tax scenarios on the available figures.
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What is decided, and what remains open?
The task force’s review does not mean that any fee or tax has been enacted, nor that the task force has recommended one. Its creation followed HB 1142. Conduit Street reported a December 1, 2026, deadline to submit recommendations to the Governor and General Assembly, with meetings scheduled for October 30 and November 30.
Further comparison would need to address not only potential revenue, but also who can impose and administer each measure, who pays it, whether local rules would vary, and how local revenue authority relates to state and county responsibilities for school costs. The final recommendations and any measures the task force may advance remained unresolved as of October 7, 2026.
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