Local business leaders and at least three councilmembers are yet again pushing to reduce Montgomery County’s energy tax with a key hearing on the proposal set for Wednesday.
Councilmember Nancy Floreen has proposed cutting the tax by 10 percent, which would mean a roughly $11.5 million revenue loss for the county. Councilmembers Roger Berliner and Sidney Katz are supporting Floreen’s proposal.
The annual energy tax debate dates back to 2010, when County Executive Ike Leggett successfully doubled the county’s fuel-energy tax rate to help raise revenue in the middle of mounting financial difficulties.
Leggett promised to let the tax increase sunset at the end of fiscal year 2012. In his fiscal year 2013 budget, Leggett decided against the sunset proposal, leading the County Council to make smaller reductions in the last two years.
“The tax—which has no stated connection to an energy or other policy objective—was imposed to generate revenue to fill a budget gap; it was not designed as an incentive to conserve energy and there are no metrics to support that it is doing so,” according to a letter last week from five local chamber groups and building industry representatives.
The Montgomery County Chamber of Commerce sent out an action alert last week advising members of Wednesday’s full council work session on Floreen’s proposal.
While Berliner and Katz support cutting the tax by 10 percent, two council committees were split on the matter last week.
The council must balance the potential loss of $11.5 million in revenue with $23.1 million in other spending that various committees would like to add to Leggett’s proposed $5 billion fiscal year 2016 budget.