Baltimore County’s proposed $4.8 billion budget for fiscal year 2026 includes no tax rate increases, no cuts to beloved programs, and nearly half a billion dollars in a “rainy day” fund for unanticipated expenses.

Spending is projected to increase 3 percent — a cause for cheer given the county’s tight finances and some dire predictions entering the budgeting cycle.

“I mean, it’s not great news,” county Budget Director Kevin Reed said of the budget. “But I think we’ve positioned ourselves very well because we’re very conservative in the revenues that we do forecast.”

County Executive Kathy Klausmeier was to address the County Council and formally unveil the budget Friday morning. The address is her first since being appointed county executive 95 days ago. Yet Klausmeier, who spent 30 years in the Maryland General Assembly, is no stranger to budgets. She served as vice chair of the influential Senate Finance Committee before her appointment to the top county job, succeeding Johnny Olszewski Jr., who was elected to Congress.

Here are five things to know about the budget:

No tax rate hike, thanks to higher home prices

Every smart politician wants to balance a budget without raising taxes, even if — like Klausmeier — they will not be running for their particular position again. Rising home prices pushed up real estate assessments, bringing in additional tax revenue to offset other expenses. In the end, Klausmeier decided that county residents faced so many burdens — among them higher electric bills, new state taxes, and inflation — that she could not ask them to pay more in taxes. The county’s real property tax rate is $1.10 per $100 of assessed value.

Uncertainty over federal funding

The county takes in about $272 million per year from federal grants. Currently, Reed said, the county is waiting on about $10 million of that for reimbursement.

“There’s a million and a half dollars that we’re a little worried about,” Reed said, though he has no indication the Trump administration will abandon its reimbursement responsibilities. He said team members are in constant contact with federal partners to discuss the matter.

But even if these matters are resolved, federal workers continue to grapple with uncertainty about their futures, as well as their ability to pay mortgages and support county businesses. Car dealers, in particular, are seeing sales plummet due to recent Trump tariffs. And all of the federal uncertainty comes after enduring the state budget uncertainty.

State leaves the county $15 million in the hole

Everyone expected it to be worse, but the county is less than thrilled to have to make up a shortfall for teachers’ pensions and other expenses that the state usually picks up. Nevertheless, the county is still including promised funding to move ahead with construction of a new library in Randallstown. The county is also investing $38 million in road improvement work, $36 million in waterway improvements, and $60 million to build senior centers in North County and Jacksonville.

‘Rainy day’ fund would be expanded

The county’s Spending Affordability Committee requires 10 percent of the total budget be set aside in reserves, or rainy-day funds. Reed said the budget team this year went with 18 percent — about half a billion dollars — because he is concerned about a shortfall from federal grants. Better to have the money and not need it immediately than have to cut programs. The county also is conservative because it needs to maintain its AAA bond rating, which only four counties in the state have.

School system gets more but not all it wanted

Klausmeier’s daughter teaches in the county schools; her four grandchildren attend them; and, she was a proud PTA president years ago. The tough budget year still provides $350 million for two long-awaited public high schools, Dulaney Valley and Towson. The school system makes up a huge part of the county budget; the county appropriates the money, but school administrators decide how to use it. Whether administrators will use it for teachers’ raises is up to them, Reed said, but Baltimore County, even in tough times, managed to give its employees a 2 percent cost-of- living increase.

It may not be great news, but it’s not as bad as it could have been.