Mission Statement

This section provides budget data for the repayment of general obligation bond issues, and other long- and short-term financing for public facilities, equipment, and infrastructure in the Debt Service Fund for all tax supported County agencies (Montgomery County Government, Maryland-National Capital Park and Planning Commission, Montgomery County Public Schools, and Montgomery College), as well as other associated costs. Non-tax supported debt repayment related to the Montgomery Housing Initiative Property Acquisition Fund, and Water Quality Protection bonds are also included.

Budget Overview

The total approved FY25 Operating Budget for Debt Service is $480,087,720, an increase of $11,767,780 or 2.5 percent from the FY24 approved budget of $468,319,940. This amount includes long-term lease expenditures of $2,958,100, short-term financing of $10,737,700 and other long-term debt of $44,075,360.

FY25 Approved Changes
The Debt Service appropriation increase of 2.5 percent is primarily due to additional long-term debt.

G.O. Bonds are issued by the County to finance a major portion of the construction of long-lived additions or improvements to the County's publicly-owned infrastructure. The County's budget and fiscal plan for these improvements is known as the Capital Improvements Program (CIP) and is published separately from the Operating Budget and Public Services Program. Currently, G.O. Bonds are anticipated to fund approximately 30.0 percent of the County's capital expenditures for the six years of the Approved FY25-30 CIP. Other long-term debt includes financing for the Silver Spring Music Venue, Incubators, Affordable Housing (MHI Property Acquisition), Stormwater Management (Water Quality Protection Bonds), Wheaton Redevelopment, Rockville Core, and Energy Performance Contracting.

Long-term leases are similar to debt service in that they are long-term commitments of County funds for the construction or purchase of long-lived assets. They are displayed and appropriated within the Debt Service Fund. Short-term financing, where the payments represent a substantial County commitment for the acquisition of assets which have a shorter life, but still result in a substantial asset, are also displayed and appropriated within this Fund.

The FY25 Debt Service budget is predicated on the bond issuance requirements in the Approved CIP, adjusted for inflation. An interest cost of 5.0 percent was budgeted for the Fall 2024 issuance. Projected interest rates for bond issues for FY25 through FY30 are based on market expectations for coupon rates, which drive actual debt service costs. Under these projections and assumptions, total Debt Service will increase from $480.1 million in FY25 to $536.1 million by FY30.