T&EIMFP ITEM 1-2
April 21, 2010
Worksession
MEMORANDUM
TO:
Transportation, Infrastructure, Energy and Environment!
Management and Fiscal Policy Committee
FROM:
~
Michael Faden, Senior Legislative Attorney
Worksession: Expedited Bill 15-10, Taxation - Fuel-Energy Tax - Rate and
Resolution to change fuel/energy tax rates
SUBJECT:
Expedited Bill 15-10, Taxation - Fuel-Energy Tax - Rate, and the alternative resolution
to change the fuel/energy tax rates, sponsored by the Council President at the request of the
County Executive, was introduced on March 23,2010. A public hearing was held on April 20.
Background/Summary This Bill and resolution, as proposed on March 15, would
increase the current rates of the fuel-energy tax by 39.6% to raise an estimated additional $50
million in FYIl. For current energy tax revenue data, see the budget table on ©Il.
The most recent increase in the rates of the fuel-energy tax took effect on July I, 2008.
Proposed by Councilmember Floreen as a carbon surtax, it raised the rates applied to electricity,
fuel oil, and steam by 10%, gas by 5%, and coal by 20%, in order to raise an estimated additional
$11.1 million in FY09. Of the increased revenue, $2.37 million was allocated to fund energy­
related programs.
On March 25 the Executive proposed a revised rate schedule (see ©12) that would
increase each category of rates by 63.7%, rather than the original 39.6%, to raise about $80
million, rather than $50 million, more in FYIl. For data on the impact of the proposed 63.7%
increase, see © 16. 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.
Schedule Council President Floreen recently advised her colleagues that she plans to
schedule Council action on the energy tax on May 19, when other revenue items are acted on.
Council staff will recommend that the resolution, rather than the Bill, be the vehicle for any
action on this item.
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Issues
1) How much (if any) to increase this tax?
As mentioned, the Executive's latest
proposal would raise the current rates by 63.7% to raise an added $80 million from this tax.
Business representatives, who would be hit hardest because the business rates are 2 2/3 times the
residential rates, oppose an increase of this magnitude (see Chevy Chase Land Co. letter, ©17;
Examiner
article, ©19). (For data on relative impact of this rate increase, furnished by Finance
Department staff, and reprinted by the
Examiner,
see bottom table on ©16.) Chamber of
Commerce representatives were scheduled to testify at the hearing on this Bill and resolution.
2) When should any increase take effect?
The Executive originally proposed that the
new rates take effect on July 1, which has been customary when the rates are raised during the
operating budget process. His March 25 revision proposed accelerating the effective date to May
1 so that some revenue would flow to the County during FYlO. Executive staff asserted that the
energy taxpayers, primarily Pepco, would be able to meet this timetable. A representative of
Pepco was scheduled to testify at the hearing on this Bill and resolution.
If the Council does not act on this Bill or resolution until May 19, as Council President
Floreen has scheduled, the new rates could apply to energy delivered on or after May 1. The
County Attorney believes, and Council staff concurs, that doing so would be legally permissible.
This packet contains:
Expedited Bill 15-10
Legislative Request Report
Memo from County Executive
Resolution
Rate schedule (3-15-10)
Revenue data
Revised rate schedule (3-25-10)
Finance Department answers to aLa questions
Comparative revenue data
Data on impact of increase
Chevy Chase Land Co. letter
Examiner
article
F:\LAW\BILLS\IOI5 Fuel Energy Tax\T&E-MFP Memo.Doc
Circle #
1
5
6
9
10
11
12
13
15
16
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19
2
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Expedited Bill No.
15-10
Concerning: Taxation - Fuel-Energy
Tax - Rate
Revised: 3-22-10
Draft No. _1_
Introduced:
March 23, 2010
Expires:
September 23.2011
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
--.:..!N~on~e::._._
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
increase the rates ofthe fuel-energy
tax;
and
(2)
generally amend County laws related to the fuel-energy tax.
By amending
Montgomery County Code
Chapter 52, Taxation
Section 52-14, Fuel-energy tax
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL
No.
15-10
1
2
Sec.
1.
Section 52-14 is amended as follows:
52-14. Fuel-energy tax.
(a)
A tax is levied and imposed on every person transmitting, distributing,
manufacturing, producing, or supplying electricity, gas, steam, coal,
fuel oil, or liquefied petroleum gas in the County. Beginning on July
3
4
5
6
7
L
2010, the tax rates in dollars are:
ill
For fuel-energy transmitted,
FUEL-ENERGY
Electricity
Uw:
kilowatt hr)
I
distributed,
manufactured,
8
produced, or supplied for residential and agricultural purposes:
TAX RATE
$0.0072924198
$0.0628010617
$0.0822605134
$18.6267531744
Natural Gas
Uw:
thenn)
Steam
Uw:
thenn)
Coal
Uw:
ton)
Fuel oil
Uw:
gallon):
No·1
No.2
No.J
No.4
No .
.2.
No.Q
Liguefied petroleum gas
Uw:
pound)
$0.0899987212
$0.0933631594
$0.0933631594
$0.0955500442
I
$0.0974004852
$0.0995873700
$0.0135686262
distributed,
manufactured,
9
10
ill
For
fuel-energy
transmitted,
produced, or supplied for non-residential purposes:
FUEL-ENERGY
Electricity
Uw:
kilowatt
h!}
TAX RATE
$0.0193251926
F:\LAW\8ILLS\1015 Fuel EnergyTax\BilI1.00C
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EXPEDITED BILL
No. 15-10
I
Natural Gas
~
therm}
Steam
~
therm}
$0.1664230814
$0.2179903605
1.M9.3578373320
!
i
Coal~ton}
Fuel oil
~
gallon}:
:-­
No.1
$0.2384966112
$0.2474123724
$0.2474123724
$0.2532076172
$0.2581112858
$0.2639065305
$0.0359568595
No.
f.
No.3
No·1
No.~
No.6
Liguefied Qetroleum gas
~
Qound}
11
The County Council [must] may set the rates for various forms of fuel
and energy by resolution adopted according to the requirements of
Section 52-17(c). The Council may, from time to time, revise, amend,
increase, or decrease the rates, including establishing different rates
for fuel or energy delivered for different categories of final
consumption, such as residential or agricultural use. The rates must
be based on a weight or other unit of measure regularly used by [such]
persons in the conduct of their business. The rate for each form of
fuel or energy should impose an equal or substantially equal tax on the
equivalent energy content of each form of fuel or energy for a
particular category of use. The tax does not apply to the transmission
or distribution of electricity, gas, steam, coal, fuel oil, or liquefied
petroleum gas in interstate commerce through the County if the tax
would exceed the taxing power of the County under the United States
Constitution. The tax does not apply to fuel or energy converted to
12
13
14
15
16
17
18
19
20
21
22
23
24
25
F:\LAWlBILLS\1015 Fuel Energy Tax\BiII1.DOC
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ExPEDITED Bill
No. 15-10
26
27
28
another form of energy that will be subject to a tax under this Section.
The tax must not be imposed at more than one point in the
transmission, distribution, manufacture, production, or supply system.
The rates of tax apply to the quantities measured at the. point of
delivery for final consumption in the County.
29
30
31
32
33
34
35
*
Sec. 2. Expedited Effective Date.
*
*
IS
The Council declares that this legislation
necessary for the immediate
protection of the public interest. This Act takes effect on the date when it becomes
law.
Approved:
36
37
38
39
40
41
42
43
44
45
Nancy Floreen, President, County Council
Approved:
Date
Isiah Leggett, County Executive
This is a correct copy ofCouncil action.
Date
46
47
Linda M. Lauer, Clerk ofthe Council
Date
F:\LAWlBILLS\1015 Fuel EnergyTaxlBiII1.DOC
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LEGISLATIVE REQUEST REPORT
Expedited Bill 15-10
Taxation - Fuel-Energy Tax Rate
DESCRIPTION:
PROBLEM:
This
Bill
would increase the rates of the fuel-energy tax.
In order to meet current fiscal challenges facing the County, the County
must increase the amount of revenue available to maintain core
Government programs and services.
To enhance the amount of revenue available to support core government
programs and services.
GOALS AND
OBJECTIVES:
COORDINATION:
Office of Management and Budget; Department of Finance
FISCAL IMPACT:
To be requested.
ECONOMIC
IMPACT:
EVALUATION:
To be requested.
Subject to the general oversight of the County Executive and the County
CounciL
EXPERIENCE
ELSEWHERE:
SOURCES OF
INFORMATION:
Joseph Beach, Director of Management and Budget
Kathleen Boucher, Assistant Chief Administrative Officer
APPLICATION
Tax laws apply County-wide.
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
F:\LAW\BlLLS\lOI5 Fuel Energy Tax\LRR,DOC
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE. MARYLAND 20850
lsiah Leggett
Cotln~)i
Executive
MEMORANDUM
March 18,2010
TO:
FROM:
SUBJECT:
Nancy Floreen, Council President
Isiah
Leggett,
County
Executive~(1};?""0""""'---.
)
b
\
7
.'
I
FY 2011 Budget Reconciliation and Financing Act
I am attaching for Council's consideration a Budget Reconciliation and Financing
Act (BRFA) which makes changes to the County Code that are necessary to reconcile my
recommended FY 2011 operating budget with projected FY 2011 revenues. This bill will help
the County address its current fiscal challenges by increasing the amount of revenue available to
maintain and enhance core government programs and services. I am also attaching a Legislative
Request Rep01i for the bill. A Fiscal Impact Statement will be transmitted to Council soon.
The BRF A consists of five primary components. First, it increases the energy tax
rates. Second, it temporarily redirects the portion of recordation tax revenues that are currently
reserved for County Government capital projects and rental assistance programs to the general
fund for general purposes. Third, it allows revenues generated by the Water Quality Protection
Charge to be used to pay debt service on bonds that fund stonnwater management infrastructure
projects. Fourth, it transfers responsibility for administering equal employment opportunity
programs from the Office of Human Resources to the Office of Human Rights. Fifth, it
authorizes the Fire and Rescue Service to impose an Emergency Medical Services (EMS)
Transport Fee.
As the Council knows, the County's energy tax is actually a tax on fuel oil,
natural gas, and electric utility providers which is passed on to all utility customers. Because the
energy ta.'{ is a broad-based tax, its impact on families is reduced by the fact that
it
is paid by
businesses and households, and all levels of government, including federal agencies located in
the County (that currently do not pay any other major County ta.'{). Additionally, the energy tax
is a consumption tax based on energy usage.
It
is not based on the overall size of the utility bill
or the cost per unit of energy used as billed to the consumer. Therefore, the amount of the tax
can be lessened by reduced energy usage. Based on existing usage patterns for the average
homeowner, my recommended FY 2011 budget assumes an average increase in the energy tax of
approximately $2.90 per month. I have also recommended additional funding in the Health and
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Nancy Floreen, Council President
March 18,2010
Page 2
Human Services budget for the County's Energy Assistance Program to minimize the impact to
low-income households.
My recommended FYIl budget contains several efforts to restructure County
Government to improve responsiveness and efficiency. One of these changes is the transfer of
the Equal Employment Opportunity program from the Office of Human Resources to the Office
of Human Rights. This shift takes advantage of existing staff resources to reduce costs and
leverage the efforts of County staff to produce better outcomes for the community. This bill
modifies the County code provisions relating to the responsibilities of the Office of Human
Resources and Office of Human Rights to reflect this change.
The EMS Transport Fee is needed to fund fire and rescue services in the County.
Without this fee, emergency response to residents will be impaired. EMS Transport Fees are
widely employed throughout the nation and by local governments throughout the Washington
region. These jurisdictions have not experienced any indication that people decline to use
emergency transports as a result of the imposition of an ambulance fee. By creating a prepaid
fund for uninsured County residents, the legislation that I am transmitting imposes a fee only on
County residents with health insurance which covers EMS Transports. This arrangement more
equitably distributes the economic burden ofproviding EMS transport services in the County
between residents and nonresidents. The legislation provides for a hardship waiver for
nonresidents who fall below 300 percent of federal poverty guidelines.
To provide the Council with a complete picture of the EMS Transport Fee
program created by this bill, I am attaching a copy of the proposed Executive Regulation to
implement the fee. This proposed regulation will be published in the April 2010 County Register
and submitted to Council after the 30-day public comment period ends on April 30.
Finally, I note that the BRFA is consistent with Bill 31-09, Consideration of
Bills - One Subject (enacted on September 29,2009), which requires that a bill "contain only
one subject matter".' As noted in the Council staff packet for Bill 31-09, that bill was intended to
adopt the "one subject rule" of the Maryland Constitution, which requires all laws enacted by the
General Assembly to contain only one subject. The Maryland Attorney General has repeatedly
concluded that budget reconciliation and financing bills do not conflict with the one subject rule.
For example, in 2005, the Attorney General noted that "[f]or the past fourteen years, 15 budget
reconciliation, budget reconciliation and financing acts or variations thereof, have been used to
balance budgets, raise revenue, make fund transfers, redistribute funds, cut mandated
appropriations and authorize or mandate appropriations.,,1 The Attorney General concluded that
all of those bills were consistent with the one subject rule because the provisions of the bills were
"clearly germane to the single subject offmancing State and local government".
See Panitz
v.
Comptroller ofthe Treasury,
247 Md. 501 (1967) (Omnibus supplemental appropriation bill
comprised a single subject for purposes of § 29 of Art III of the State Constitution even though
See May 19, 2005 memorandum from Attorney General J. Joseph Curran, Jr. to Governor Robert Ehrlich regarding
House Bill 147 (2005).
I
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Nancy Floreen, Council President
March 18, 2010
Page 3
the bill combined such diverse elements as police aid to local government; teacher salaries and
pensions; and general unrestricted grants to local government).
Attachments (3)
cc:
Joseph Adler, Director, Office of Human Resources
Jennifer Barrett, Director, Finance Department
Joseph Beach, Director, OMB
Kathleen Boucher, ACAO
Richard Bowers, Fire Chief, MCFRS
Marc Hansen, Acting County Attorney
Robert Hoyt, Director, DEP
Richard Y. Nelson, Jr., Director, DHCA
James Stowe, Director, Office of Human Rights
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Resolution No. _ _ _ _ _ _ __
Introduced:
March 23, 2010
Adopted: _ _ _ _ _ _ _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President
SUBJECT:
Fuel/energy tax - rates
Background
1.
Section 52-14 of the County Code levies a tax on persons transmitting, distributing,
manufacturing, producing, or supplying electricity, gas, steam, coal, fuel oil, or liquefied
petroleum gas in the County.
Section 52-14 also provides that the County Council may amend the fuel/energy tax rates
by resolution, after a public hearing advertised as required by Section 52-17. A public
hearing was held on this resolution on (date).
The Council finds that it is fair and equitable to continue different rates for fuels and
energy transmitted, distributed, manufactured, produced, or supplied for residential and
agricultural purposes and for non-residential purposes.
Action
2.
3.
The County Council for Montgomery County, Maryland, approves the following resolution:
1.
On and after July 1, 2010, the fuel/energy tax rates levied under Section 52-14 of the
County Code are as shown on Schedule A, attached to this resolution.
This Resolution supersedes Resolution 16-553.
2.
This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk of the Council
Date
F:\LAW\BILLS\I Oil Budget Reconciliation And Financing Act\1015 Fuel Energy Tax\FYll Draft Resolution.Doc
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Attachment
Resolution No:
SCHEDULE A (starting July 1,2010)
(a) For fuel-energy transmitted, distributed, manufactured, produced, or supplied for residential
and agricultural purposes:
FUEL-ENERGY
Electricity (per kilowatt hr)
Natural Gas (per therm)
Steam (per therm)
Coal (per ton)
Fuel oil (per gallon)
TAX RATE
$0.0072924198
$0.0628010617
$0.0822605134
$18.6267531744
$0.0899987212
$0.0933631594
$0.0933631594
$0.0955500442
$0.0974004852
$0.0995873700
$0.0135686262
~
No.3
No.4
No.5
No.6
Liquefied petroleum gas (per pound)
(b) For fue I-energy transmitted, distributed, manufactured, produced, or supplied for
non-residential purposes:
~
FUEL-ENERGY
city (per kilowatt hr)
tural Gas (per therm)
ISteam (per therm)
Coal (per ton)
Fuel oil (per gallon)
No.1
No.2
No.3
No.4
No.5
No.6
Liquefied petroleum gas (per pound)
$0.0193251926
$0.1664230814
$0.2179903605
$49.3578373320
$0.2384966112
$0.2474123724
$0.2474123724
$0.2532076172
$0.2581112858
$0.2639065305
$0.0359568595
F:\LAW\BILLS\1 0 15 fuel energy tax\
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SCHEDULE C-2
Revenues Detailed By Agency
•OTHER
I
SUMMARY
GRAND TOTAL ALL
ES
-0.7%
SCHEDULE C-3
Revenues Detailed By Agency, Fund and Type
TAX SUPPORTED
MONTGOMERY COUNTY GOVERNMENT
County General Funcl
Taxes
Property TClXe5
Tax
Licenses
&
Permits
Business
Licen5es
7J -2
Budget Summary Schedules: Revenues
FYI
J
Operating Budget and Public Services Program FYII-16
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Attachment
Resolution No:
SCHEDULE A (starting May 1,2010)
(a) For fuel-energy transmitted, distributed, manufactured, produced, or supplied for residential
and agricultural purposes:
llio.
FUEL-ENERGY
Electricity (per kilowatt hr)
Natural Gas (per therm)
Steam (pertherm)
Coal (per ton)
Fuel oil (per gallon)
I
0.2
No.3
No.4
No.5
No.6
Liquefied petroleum gas (per pound)
TAX RATE
$0.0085513547
$0.0736427923
$0.0964616479
$21.8424032568
$0.1055357497
$0.1094810 114
$0.1094810114
$0.1120454315
$0.1142153254
$0.1167797455
$0.0159110610
(b) For fue I-energy transmitted, distributed, manufactured, produced, or supplied for
non-residential purposes:
FUEL-ENERGY
Electricity (per kilowatt hr)
Natural Gas (per therm)
Steam (per therm)
Coal (per ton)
Fuel oil (per gallon)
No.1
No.2
No.3
No.4
No.5
No.6
Liquefied petroleum gas (per pound)
$0.0226614186
$0.1951537137
$0.2556233669
$57.8787820290
$0.2796697368
$0.2901246802
$0.2901246802
$0.2969203935
$0.3026706124
$0.3094663255
$0.0421643116
C:\Documents and Settings\fadenm\Local Settings\Temporary Internet Files\OLK396\
@
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Questions Related to the County Executive's Proposed FuelJEnergy Tax Increase
Based on:
(1) March 15
th
Proposed Operating Budget; and
(2) March 25,2010 Memorandum from the County Executive to the Council President
1. Please provide the set of assumptions used to calculate the projected increase in revenue from the
Executive's proposed increase in the Fuel/Energy Tax. Include an explanation of whether and/or
how the March 25
th
amendment to the proposal changes the calculation.
2. Please provide details of the calculation that led to the statement that, if approved by the Council, the
higher tax will "increase the average residential utility bill by approximately $5 per month"?
See spreadsheet attachment titled: Impact of Proposed FYll Increase - REVISED 03-25-10.xls
3. What are the comparable calculations for the projected increase in the average non-residential and
agricultural utility bills?
See spreadsheet attachment titled: Impact of Proposed FYII Increase
REVISED 03-25-1O.xls
4. Is 100% of the County's FuellEnergy tax passed on to customers by the utilities? Do the utility
companies add an additional amount on the customer's bill for collecting the FuellEnergy tax on
behalf of the County? If so, how much?
Yes, utilities companies passed on to customers the County's fuel/energy tax. The additional amount
reflected on the customer's bill under the County line item is for the MD gross receipts tax and MD
PSC assessment fee. Additional amount is about 2.20% .
The County has no information regarding individual (non-regulated companies) that distribute fuel
products to customers in the County (e.g .. fuel oil
#
2)
5. Is anyone (or any entity) exempt from the FuellEnergy tax?
None of our fuel/energy tax providers are exempt from this tax.
6. Is multi-family housing charged at the residential rate or the non-residential rate? Is there any
distinction between multi-family resident-owned housing (e.g., condominiums) and multi-family
rental housing?
This varies among providers.
From a heating oil provider, a multi-family housing and rental housing is charged at the residential
rate as long as they provide a living space.
On the other hand, PEPCO charges a residential rate for individually metered residential dwellings ­
and the commercial rate to multi-family dwellings (condos and apartments) that are master metered.
Washington Gas charges multi-family housing or rental at the residential rate.
7. When are tax revenues counted toward County revenue - when customers use fuel or when the tax
revenues are paid to the County by the utilities?
Revenues are recognized when they are paid (monthly/qumierly) to the County by the taxpayer
i.e., provider/distributor of the fuel energy product.
@
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8.
Please provide data for each table on the next page.
For FYll, please provide data based on the
increase in the County Executive's March 15
th
proposed budget
and
data showing
the incremental
change
between the tax increase
in
the Executive's proposed budget (39.6%) and increase
in
the
Executive's March 25
th
proposal (63.7%).
See spreadsheet attachment titled: MFaden
~
LRubin.xls
Responses Requested by Tuesday,
April 13,
2010
2
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FuelJEnergy Tax Data Tables
April 15, 2010
Annual Tax Revenue, FY03-FYll
($
in
millions)
·~iM~iY03-FY11.Prole'Ctat,;:,··.····
~_-
"S,~.,
',,,,,,,_,.,,y'.__ ,,
"-"'..•._T.
'".
", "
'<".,",:,'
v,
'v
~-----------+~~~~-\-~--~~~~~~-+~~~~~~
~~'Jjiri¥iili~~.
Residential
Non-Residential
$18.2
$26.1
$94.1
$96.2
$132.2
$157.9
$217.0
Total
$129.3
*Projected
** Projected based on the County Executive's March 25
th
proposed tax increase
Source: Department of Finance, OLO Analysis
Average Annual Tax Bill, FY09-FYll
'~$'1D~'
"
.
,"",
Residential
$99
$161
$62
63%
$2,618
$4,157
$1,539
Non-Residential
59%
*Projected
**Projected based on the County Executive's March 25
th
proposed
tax
increase
Source: Department of Finance, OLO Analysis
Total Number of Consumers, FYI0 and FYll
CategorY .....
~..:
,
..
FYlO ....
362,000
36,737
.
FYll Projected
367,000
37,977
Residential
Non-Residential
Source: Department of Fmance
Percentage of Total Tax Revenue
by Category, FYI0 and FYll
;Y:F1:n*; .
Residential
Non-Residential
27.2%
72.8%
100%
27.2%
72.8%
100%
Total
*Projected
Source: Department of Finance
prior four fiscal years
Based on the average of the
Annual Tax Revenue, FY03-FYll
($
millions)
*Projected
Source: Department of Finance
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Impact of Proposed Increase to Energy Tax
Average Impact to Residential and Non·Residential Taxpayers
Based on latest figures available for energy consumption (2009 Energy Tax data), housing units (2008 Census Bureau
data) and business establishments (2007 Census Bureau data)
Residential
Units
Consumed
12,808
624
Current
Tax
$66.91
$28.08
$94.99
Proposed 63.7% Increase
For Each
Total
Difference
1% Increase
$109.53
$42.62
$0.67
$45.97
$17.89
$0.28
$155.49
$60.51
$0.95
$5.04
Units
Fuel Type
kWh
Electricity
Heating Fuel
Therm
Total
Average Monthly Increase
Non-Residential
Tax Rate
0.005224
0.044986
Fuel Type
Units
Electricit
kWh
Heatina Fuel
Therm
Total
Average Monthly Increase
Some Examples
Units
Consumed
204,614
5,325
Tax Rate
0.013843
0.119214
Current
Tax
$2,832.53
$634.86
$3,467.39
Proposed 63.7% Increase
Total
I Difference
$4,636.851
$1,804.32
$1,039.261
$404.40
$5,676.121
$2,208.73
$184.06
3,000 sq. ft.. 4-bedroom, 3.5 bath house (DEP employee)
Council Office Building (142,480 sq. ft.)
East County Government Center (13,700 sq. ft.)
Current
Tax
$89.68
$47,075.00
$3,537.86
Proposed 63.7% Increase
For Each
Total
Difference
1% Increase
$146.80
$57.12
$0.90
$77,061.78
$29,986.78
$470.75
$1,040.13
$4,577.99
$35.38
~
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Page 1 of2
r7,C:
~
From:
Sent: .
To:
Floreen's Office, Councilmember
Monday, April 19, 2010 2:26 PM
Montgomery County Council
~1f
Subject: FW: Energy Tax and SS clean and safe
056085
-----Original Message----­
From: Nona
L.
Olson [mailto:nlo@cclandco.com]
Sent:
Monday! April19! 2010
1:43
PM
To: Floreen's Office! Councilmember; Andrew's Office, Councilmember; Berliner's Office! Councilmember; Eirich's
Office, Councilmember; Ervin's Office! Councilmember; Knapp's Office! Councilmember; Leventhal's Office,
Councilmember; Navarro's Office, Councilmember;Trachtenberg's Office, Councilmember
Cc:
'Jane Redicker'
Subject:
Energy Tax and
55
clean and safe
Good afternoon Councilmembers
M6ntg County Energy Tax
I
have attached a spreadsheet showing the impact that the proposed Montgomery County Energy Tax rate
increase would have on simply 5 meters serving some of our commercial office buildings. These are not
necessarily the only meters serving each building, but I wanted to present something so that the full impact of this
rate increase is understood. It is a HUGE increase for both building owners and for tenants who in some cases,
but not all, may share a portion of building expenses. Everyone is looking for extra money but this burden
against businesses is unwarranted. This is also on top of the Capacity
&
Transmission Surcharge that appeared
on our March Pepco bills through our supplier, which after being phased in over the next couple of months will
cost the five buildings referenced on the spreadsheet $269,405.
I urge you to vote
no on
increasing the
Montgomery County Energy Tax.
Silver Spring Safe and Clean Expenses
Businesses have invested in and made a commitment to Silver Spring by opening their businesses or retail
operations in an area that not too long ago had nothing going for it. Those same businesses pay a CBD tax for
special services to ensure that there is no gap between what's needed and what's delivered. Silver Spring is a
people hub with the metro, the Marc train and good retail and commercial activity. The businesses count on clean
and safe streets and parking lots, and pay extra to offset the normal issues that occur when there are lots of
people coming from outside the area. Those people continue to come because they also can count on clean and
safe streets and parking lots. Every effort needsto be made to ensure that folks come back and visit again, and
continue to made investments and commitments to the Silver Spring area. Silver Spring's common area
maintenance and safety programs can not be compromised because everyone knows that reversing an image is
a time consuming and costly event in itself.
I urge you not
to
compromise the progress that Silver Spring
has made by reducing the coverage times for the Clean and Safe
Team.
Thank you for your consideration of these important issues.
Leslie Olson
Board member
Greater Silver Spring Chamber of Commerce
N. Leslie Olson, RPA
Assistant Vice President
The Chevy Chase Land Company
2 Wisconsin Circle, Suite 560
Chevy Chase, Maryland 20815
tel 301-654-2292
fax 301-654-2291
nlo@cclandco.com
4/20/2010
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MONTGOMERY COUNTY ENERGY TAX (MCET)
PropertyACldr~$s'
.
'billing
period
2 Wise
Circle
0.0141501
0.022661419
'KWH used 'ex1StiJl9 MCET !existingcharge'proposed MCET 'new charge
.··'annual
increase
0.0141501
0.0141501
0.0141501
0.0141501·
0.0141501
,,"
"::
1/28/10-2/24/10
1 .... 4929781
2/4/10-3/5/10
11/4/10-2/1/10
..•.
: (.,;
, $6,975.691
$4,774.9:2
,.
0.022661419
0.022661419
0.022661419
0.022661419
0.022661419
$11.171.581
$7.647.051
'. $8,684:351
$3,154.47
'$5,914.63
$50,350.71
$34,465.56
$39.140.69
$14,217.31
$26,657.52
8401
Ct
Ave···
2
Bethesda Metro.
. .
'...,
~
;3374481.
3832221
$5A2i63
7316
Wise
Ave
"
2/26/10-3/30/10
L
····1392001
2610001
$1.969.69
$3,693.1}
5440
VVesterrlAve'
111/25/09-12/3010d·'
':-;",
<.. •.
$164,831 ;80
~
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Businesses push back against 64 percent -- or more -- energy tax hike
I
Washington Exam... Page 1 of 5
(!~
PRINTTHIS
Local
[Print] [Email]
Busillesses push back
against 64 percent -- or more -- energy tax hike
By:
Alan Suderm_all
Examiner
Staff Writer
April 20,
2010
Montgomery County Executive Ike Leggett may be looking to
increase energy taxes even more than the 64 percent raise he already proposed.
Leggett is set to present a revised budget Thursday to cover a recent write-down of more than $160
million in income tax revenues that bring the county's budget gap to nearly $1 billion.
Business leaders said they are concerned that Leggett will rely on raising energy taxes to help bridge
that gap, and County Council staff said they "would not be surprised" to see another proposed increase.
Leggett's spokesman, Patrick Lacefield, said the revised budget is "still a work in progress."
Revenues collected from the energy tax have jumped
from $26.1 million in fiscal 2003 to $132 million in
fiscal 2010. Leggett's current proposed increase would
raise revenues to $217 million a year, or a 731 percent
increase since fiscal 2003.
Power up
n>
Examples of
annual energy tax
rates increases:
Current
tax
$89.68
$3,537.86
$47,075.00
Proposed
tax
$146.80
$4,577.99
$77,061.78
Size ofbuilding
Difference
$57.12
$1,040.\3
$29,986.78
Leggett first proposed a 40 percent energy tax increase
last month. Two weeks later, he bumped that up to
63.7 percent because bond-rating agencies complained
that the county's reserves were too low. He said he
favored an energy tax increase over a property tax
increase since it would affect households less and
federal agencies housed in Montgomery would pay for
much of the increased revenues.
3,000 sq. ft.
house
13,700 sq. ft.
office building
142,000 sq. ft.
office building
n>
But business advocates say the energy tax increases would stunt job growth, cause struggling small
businesses to fail, and deter companies from moving into the county, according to local business
http://www.printthis.clickability.comlpt/cpt?action=cpt&tide= Businesses+push+back+agai...
4/20/2010
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Businesses push back against 64 percent -- or more -- energy tax hike
I
Washington Exam... Page 2 of 5
advocates.
"This is a make-it or break-it thing," said Ginanne Italiano, president of the Greater Bethesda-Chevy
Chase Chamber of Commerce.
Leggett's proposed energy tax increase would raise the average non-residential energy bills by $2,200 a
year, according to county data. Average residential electric and natural gas bills, which have tax rates
about a two-and-a-half times lower than non-residential customers, would rise by $60 a year.
For more energy-hungry businesses, such as restaurants or biotech companies, the bill could be much
larger. Lisa Fadden, vice president ofthe Montgomery County Chamber of Commerce, said the increase
for some biotech companies could amount to more than $500,000 a year.
"It's huge ... those are the people we are trying to attract here," Fadden said, referencing the county's
recent efforts at bolstering public investment in local biotech companies.
More from Alan Suderman
J2Q~.nesses PQ~J].
bacJ
agaitJ.~.t.9..4-P.~r~~nt--
or
mQ[~"":--=-~.1}~r.gy_t.1;!~hi.ke
Montgomery pay increases much higher than private sector
Leggett approves pay increases for helicopter police
MontgQmery COUlTIY-llnions at pdds over furlough plan
CASA fights against buJiget
cut~
Topics
Washington Examiner, LkeLeggett, energy taxe.§,
GinanneJtali~<lnQ,
Greater
Bethesd1;!-Ch~y}'~Chase
Chamber of Commerce, Lisa Fadden, Montgomery County Chamber of Commerce
http://www.printthis.clickability.comlptlcpt?action=cpt&title=Businesses+push+back+agai...
4/20/2010