Mobilize Against the Montgomery County Energy Tax
April 29, 2010
Today, Thursday, April 29, the MFP/T&E
committees’ worksession on the energy tax will be held in the 3rd floor auditorium at the County Council building at 1:30 p.m. If you have time in your afternoon, the Chambers are urging members to attend the hearing, and show in force, that this is not the time to place any more of a burden on the business community than we already have!
I think I'm going to this. I hope to see you there.
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We first alerted you earlier this month to a move by Montgomery County (Maryland) County Executive Ike Leggett to double the county's energy tax. What's more, it'll be done in a way that really, really hurts businesses.
As someone who is out helping businesses reduce their costs by negotiating lower electricity and natural-gas rates, I see that the economy is just starting to turn around a bit for some companies here in the mid-Atlantic. Other businesses, though, are still mired in the recession.
Let me be clear: This tax will hurt businesses at the worst time for them. We're talking about any business that pays its own utility bills. And if you think that you're off the hook because you're in an office building and don't pay your own utilities, think again. Your landlord still has to pay the tax. Where's that money going to come from? Higher rents or CAM fees, maybe?
Three of our Affinity Partners -- the Bethesda-Chevy Chase Chamber of Commerce, the MidAtlantic Association of Cleaners (MAC) and the Olney Chamber of Commerce -- have joined with other Chambers and business groups in the county to defeat this tax. They're rallying hard, and we at EA are happy to help them spread the word.
Here's what one Legislative Alert says about the tax:
The County Executive has proposed that the County Council impose a drastic increase in the energy tax of all residents and non-residents throughout the County, in order to raise at least $80 million to offset the County's budget gap. It is important to note that the Executive has focused on the impact of this increase on residential customers, which is expected to be minimal ($5 per month), but has not acknowledged the dramatic impact on businesses, which are charged a much higher rate. This regressive tax hike was first proposed at 40%, then was increased to 63.7% and later to double the current tax rate.
Please know that this proposed increase can possibly go even higher. In the packet that was given to the County Council on Friday, the following statement was made by Council staff: "Given the recent news of further shortfalls in revenue from the County income tax, Council staff would not be surprised to see another increase in the proposed rates when the Executive submits revised budget recommendations this week."
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As an example, one apartment building in downtown Bethesda will be paying an increase of $20,500 in taxes - per year! A non-profit organization that serves children currently pays $21,582 in energy taxes. With this proposed increase, they will need to pay $35,330 - an increase of $13,747! No one is exempt from these taxes in Montgomery County.
I want to emphasize a point made above: "It is important to note that the Executive has focused on the impact of this increase on residential customers, which is expected to be minimal ($5 per month), but has not acknowledged the dramatic impact on businesses, which are charged a much higher rate."
Want to do something about it? We've provided several items with which you can take action (below), including the actual text of letters and alerts being sent to Council and to individual chamber/business group members, the way to calculate your tax, and e-mail addresses of your representatives in Council.
How to Calculate Your Businesses' Tax Increase
1) Find your current Montgomery County Energy Tax amount on page 2 of your utility bill, right hand side, under "Distribution Services."
2) Multiply that amount by 1.00.
3) This is the additional tax you would pay each month (on average) immediately upon final approval by the County Council in May.
Other Resources
Link to the Council's Packet on the Energy Tax
Copy of the letter sent by Chambers and business organizations to Council President Floreen (.doc/Word file)
Copy of the Legislative Alert sent by MAC President Richard Ehrenreich to its members (.doc/Word file)
The time to act is NOW. Even if you don't own a business in Montgomery County, this tax can have a direct impact on your life. First off, your own energy bills will go up. If you live in an apartment building, you should probably expect your rent to go up even higher when it comes time to renew your lease. And if you live in a condo, it'll cost more to cool, heat and light those common areas. So you might be saying "hello" to higher condo association fees.
Also, a business you know and love may have to shut its doors (or raise prices) because of this new tax. And if you work for a business that's already on thin ice, this new tax may sent it plunging into the icy waters of bankruptcy or shutting down entirely.
That's why this is one of those cases where both business owners and citizens alike need to stand together and say "NO" to this new tax.
By the way, this blog will not become political in tone. We just couldn't let this particular issue go by without saying something, especially because our affected Affinity Partners are in the battle. We always stand with our partners.
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