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MoCo Energy Tax Rises On Thursday

May
18
2010

While driving after yesterday's Montgomery County Council committee meeting on the proposed new energy tax that is going to hit all of us here, I realized that not a lot was said, but some damage was done. And there's a lot of unknown coming down the road, too.

First off, the immediate news: the county's energy tax is going up this Thursday (May 20th). This is to put an additional $21.4 into fiscal year 2010's budget -- as in the current budget -- and the county's coffers.

We're still not yet sure what the actual rate will be per kilowatt hour (kWh), per therm of gas, etc. That will be decided at a council general session tomorrow (Wednesday). One thing is for sure, though: Utility bill payers in Montgomery County -- commercial and residential alike -- will be hit hard with their June bills.

Second, the council has determined that the new tax for fiscal year 2011 (starting July 1) will be a more equitable split -- 50/50 -- so that neither residential nor non-residential accounts will be favored. You'll remember that because commercial utility account holders are taxed at almost 3 times the residential rate, those holders would have shouldered a vast majority of the burden under the tax as it was initially proposed by County Executive Isiah Leggett.

Today's Washington Post had a pretty decent article on the entire situation here in Montgomery County. While details about the energy tax was toward the end of the story (talk about burying the lead), I did really like this quote:

... (E)conomic realities are closing in on a political culture accustomed to ever-rising budgets and government generosity, forcing officials and the public to face an uncomfortable and unfamiliar future.

"When there's a lot of money, it's fun to give it away," said Nancy Dacek, a former PTA leader who served for a dozen years on the Montgomery County Council, including during the region's last major downturn in the early 1990s.

"This is a very caring county. We are concerned about our neighborhoods. We are concerned about our schools. We always have been, and that's a good thing," Dacek said. "But we can't say no, either, and we're going to have to do that."


From what I heard after the meeting today, though, there may be more "no's" going around than we thought. Probably the biggest item not discussed by the committee today was the total amount of money the county will seek for fiscal year 2011. Last week, the figure of $135 million was introduced. Now I'm hearing that they may whittle that amount down to $105 million and maybe, just maybe, even less. We may or may not find out more this Wednesday.  But the bottom line is that energy taxes in Montgomery County will be going up.  Big time.

The committee didn't discuss another area -- single-metered apartment buildings that are charged (and taxed at) the commercial rate. Members said that coming to some kind of compromise is a top priority for them, but that with the complexity of the issue, any kind of resolution will take time to determine.

I can actually understand this one, although I think the easiest solution would be to just tax these buildings at the residential rate. If they try to get cute -- like trying to determine common area versus dwelling rates, etc. -- there's all kinds of potential nightmare scenarios out there that would be a real pain to implement.

One other item that was discussed is how long this tax will last. Right now, the council is proposing that it will sunset in two years. But as at-large Councilman George Leventhal put it:

"If I were a taxpayer, I would be skeptical if a politician told me 'I'm raising your taxes -- but only for two years.' I hope we mean it."

I know of cases when taxes were supposed to sunset, and they never did. I echo Councilman Leventhal's sentiment: I hope they mean it. But we all know how addicted that government can get to new, er, "income" streams.

So ... stay tuned on Wednesday. We'll have the result hopefully soon after the meeting.

Related Articles

Montgomery Wants Immediate Energy Tax Hikes to Fill New Gap - Washington Examiner

Higher Tax On Energy May Hit Businesses Harder - ABC 7 Washington

Energy Tax Increase to Fall on Homes, Businesses Equally - The Gazette

Tagselectricity, montgomery county, natural gas, tax

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