At a time of economic uncertainty, Baltimore is considering a $932-million capital budget for the 2026 fiscal year, its largest investment in more than two decades.
The capital budget includes $125 million in borrowed funds for housing, school projects and city parks — a political and financial gamble for Mayor Brandon Scott, taking on new debt while grappling with federal government cuts.
Scott’s office did not immediately respond to a question about capital budget borrowing. The mayor has publicly touted his budget proposal for closing an $85 million shortfall without raising taxes or cutting city services — though nearly a third of that deficit comes from increases to various fines and fees.”
Baltimore, Budget Hearings start TOMORROW.
If you want to know how your tax dollars are being invested, tune in live tomorrow on @CharmTVBmore, starting at 9:00 AM.
Here are some quick facts that you should know. pic.twitter.com/XWezoxyWOR
— Brandon M. Scott (@MayorBMScott) May 28, 2025
The Trump administration’s federal workforce layoffs and cuts could mean less revenue for Baltimore, a potentially significant impact as at least 12,000 federal government employees work in the city, although it’s unclear how many live in the city. It also threatens Scott’s second-term goals of lowering property taxes and attracting middle-class Black families back to Baltimore.
Baltimore also relies on $200 million in federal grants that the president could slash if he deems that city officials are not complying with immigration laws.
Some members of the Baltimore City Council on Thursday said they felt like they lacked enough time to fully consider the nearly billion-dollar capital budget — even though the allotted hearing time increased from one hour in past years to two hours this year.
“I would advocate strongly to the council president and to the committee to have more hours on the capital budget,” Councilwoman Odette Ramos said during a hearing Thursday. “It is as vital as the operating budget, and the council does not get enough time with it.”
Councilman John Bullock, a member of the council’s Land Use and Transportation Committee, agreed, adding that planning discussions can cause committee meetings to take four hours or more.
Capital budget breakdown
The proposed $932-million capital budget allocates funds for city agencies to improve various infrastructure projects over six years, such as public roads and waste treatment facilities. It represents about 20% of Scott’s $4.6 billion overall fiscal 2026 budget, including a $3.6 billion operating budget.
This capital budget is a 27% increase from the previous fiscal year and a 305% increase from 10 years ago, when the capital budget was $230 million.
Nearly 80% of funds allocated by the capital budget would flow to the city’s Department of Public Works and Department of Transportation, which stand to receive about $563 million and $180 million, respectively. Recreation and Parks ($30.3 million), City Schools ($27.5 million), and Mayor’s Office departments ($25.85 million) are among the other agencies to receive eight-figure allocations for fiscal 2026.
Beyond fiscal 2026, the proposal establishes that the city’s capital budget would exceed $1 billion in both fiscal 2027 (nearly $1.2 billion) and fiscal 2028 (nearly $1.1 billion) before tapering off to less than $900 million annually through fiscal 2031 — a reflection of the city’s willingness to borrow money immediately for capital projects.
During the hearing, city planner Sara Paranilam explained some changes to this year’s capital budget process.
The fiscal 2026 proposal distinguishes between specific one-time “projects” like ongoing construction at Baltimore City Hall and more constant “programs,” such as road improvements that require an optimal annual funding level, Paranilam said. It also requires agencies to secure federal or state grants before submitting targeted funding requests to cut down on the appropriations needed to balance the budget, she added.
“In the past, there was a different approach, and that resulted in us having a lot of appropriations for federal and state revenue that we did not have revenue to back up,” said Paranilam, chief of the planning department’s policy and data analysis division. “It is not good fiscal practice to have all those appropriations on the books that we don’t have revenue for, but it also obscures the amount that we actually have for projects.”
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