T&EIMFP ITEM 1-2
April 21, 2010
Transportation, Infrastructure, Energy and Environment!
Management and Fiscal Policy Committee
Michael Faden, Senior Legislative Attorney
Worksession: Expedited Bill 15-10, Taxation - Fuel-Energy Tax - Rate and
Resolution to change fuel/energy tax rates
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
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.