T&E/MFP ITEM 1-2
April 29, 2010
Worksession
MEMORANDUM
TO:
Transportation, Infrastructure, Energy and Environment!
. Management and Fiscal Policy Committee
FROM:
~ichael
Faden, Senior Legislative Attorney
Leslie Rubin, Legislative Analyst, Office of Legislative Oversighttt.i
1-
Fuel-Energy Tax - Rate and Resolution to
SUBJECT:
Worksession:
Expedited Bill 15-10, Taxation
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, 20 IO. 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 FYI 1. 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 1, 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 April 22, the Executive proposed a second revised rate schedule (see (21) that would increase
each category of rates by 100%, rather than the 63.7% proposed on March 25 or the 39.6% proposed in the
Executive's proposed operating budget. A 100% increase in the fuel/energy tax would raise a total of $265.0
million in FYII, or about twice the tax revenue from FYIO. If a tax increase is approved retroactive to May
1, 2010, it would also raise an additional $21.4 million in FYlO. With the April 22 proposed tax increase,
the Executive also proposed a sunset for the tax at the end of FYI2, when the tax would revert back to its
current rates.
The Executive's April 22 proposed rate schedule supersedes the rate increases proposed both
in
his
proposed operating budget (©IO) and on March 25 (©I2). For data on the impact of the proposed 100%
increase, see ©22.
Schedule
Council President Floreen has 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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Additional Information
1)
How does PEPCO categorize its customers? PEPCO publishes a documents that includes 20
different rate schedules for different types of services - two rate schedules for residential customers and IS
rate schedules for non-residential customers (see
(23).
2) How many master-metered buildings are in the County? Lesa Hoover from the Apartment and
Office Building Association of Metropolitan Washington (AOBA) reports that in Montgomery County,
among AOBA members only,
there are 79 residential buildings and 60 of those buildings are master-metered.
The 79 buildings include 19,175 units and 13,165 of the units are in master-metered buildings. Note, this
data does not reflect all master-metered buildings in the County, but represents only data for master-metered
buildings that are members of AOBA.
3) Scenarios for allocating the tax burden differently between residential and non-residential
customers. At the Committees' April 21 worksession, Councilmembers asked County Government staff for
different scenarios for allocating the tax burden differently between residential and non-residential
customers. Department of Finance staffwill have scenarios available for review at the April 29 worksession.
4) Summary of Economic Issues. In order to provide Council members with additional information,
Jacob Sesker, Planner Coordinator with the Montgomery County Planning Department, has examined the
fuellenergy tax and provided a brief summary of potential economic issues raised by the proposed increase
(see (24). His summary includes examples to illustrate alternative distributions of the tax burden between
residents and non-residents and includes questions that he has identified based on the proposed timing of a
tax increase.
5) Comparison of Montgomery County tax rates to nearby jurisdictions. This packet includes
three tables that compare the Executive's April
22
proposed fuellenergy tax with proposed FYII energy tax
rates in other nearby jurisdictions (see ©2S-29). The table on ©28 compares the Executive's proposed April
22 tax rates for electricity and natural gas to proposed FYll rates in Baltimore City, Prince George's
County, Fairfax County, and the District of Columbia.
Note: In addition to the tax rates listed for Fairfax County on ©28, Fairfax County also has separate
electricity rates for industrial customers and for master-metered apartments. In order from highest to lowest
tax rates for electricity consumption, in Fairfax County, industrial customers pay the highest rate, followed,
by residential, commercial, and master-metered apartments. Similarly, for tax rates for natural gas
consumption in Fairfax County, residential customers pay the highest rate, followed by non-residential
customers, followed by master-metered apartments. These additional Fairfax County tax rates are not
included in the table because the other jurisdictions have no equivalent tax rates.
The tables on ©29 provide examples of the projected monthly electricity tax for select County
businesses and residences, based on business and residential examples described in the written public hearing
testimony of Charles Washington, PEPCO's Manager of Government Relations. These examples also
include the projected monthly tax for these businesses and residences based on the proposed FYl1 tax rates
in the four jurisdictions identified above.
2
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Issues
1) How much (if any) to increase this tax? The Executive's April 22 proposal would raise the
current rates by 100% to raise an added $132 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).
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 April 22 revision proposed accelerating the effective date to May 1 so that some revenue would
flow to the County during FYIO. Executive staff asserted that the energy taxpayers, primarily Pepco, would
be able to meet this timetable.
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.
3) What are the options for changing the rate of master-metered residential apartment
buildings? Currently, master-metered apartment buildings are taxed at the higher rate charged to non­
residential consumers. There are three primary options for setting rates for master-metered residential
apartment buildings, identified here in order of the greatest tax burden to the lowest: (a) tax them at the non­
residential rate as established by the Council in May (status quo); (b) tax them at the non-residential rate
currently in effect (do not raise their current tax rates); or (c) tax them at the residential rate.
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
Revised rate schedule (4-22-10)
Data on impact of April 22 increase
Summary of PEPCO rate schedules
Summary of Economic Issues - Fuel/Energy Tax
Comparison of energy Tax Rates
Comparative examples of monthly electricity tax,
residential and non-residential
Circle
#
1
5
6
9
10
11
12
13
15
16
17
19
21
22
23
24
28
29
3
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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 Da-:-te-:--=-N:""o-ne-------
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 of the 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 brackets]]
* * *
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
Sec.
1.
Section 52-14 is amended as follows:
2
3
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
4
5
6
7
L
2010, the tax rates in dollars are:
ill
For
fuel-energy
transmitted,
distributed,
manufactured,
8
produced, or supplied for residential and agricultural purposes:
FUEL-ENERGY
•Electricity
~
kilowatt hr)
•Natural Gas
~
thenn)
Steam
~
thenn)
Coal~ton)
TAX RATE
$0.0072924198
$0.0628010617
$0.0822605134
$18.6267531744
Fuel oil
~
gaBon):
No·1
No.
2.
No.J
No.4
--
No.~
$0.0899987212
$0.0933631594
$0.0933631594
$0.0955500442
$0.0974004852
$0.0995873700
$0.0135686262
distributed,
manufactured,
No.
Q
Liguefied petroleum gas
~
pound)
9
ill
For
fuel-energy
transmitted,
10
produced, or supplied for non-residential purposes:
FUEL-ENERGY
Elt;l.;tricity
~
kilowatt hr)
TAX RATE
$0.0193251926
F:\LAWlBILLS\1015 Fuel Energy Tax\8iIl1.DOC
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ExPEDITED BILL
No. 15-10
I
Natural Gas
~
thenn)
Steam
~
thenn)
Coal~ton)
$0.1664230814
$0.2179903605
$49.3578373320
I
Fuel oil
~
gallon):
·No·1
!No.2
•No.3
No.4
No.~
$0.2384966112
$0.2474123724
$0.2474123724
$0.2532076172
$0.2581112858
$0.2639065305
$0.0359568595
I
No.
§.
Liguefied Qetroleum gas
~
Qound)
11
12
13
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
14
15
16
17
18
19
20
21
22
23
24
25
F:\lAW\BILLS\1015 Fuel Energy Tax\Bili 1,DOC
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EXPEDITED BILL
No. 15-10
26
27
another fonn 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_
28
29
30
31
32
33
34
35
*
Sec. 2. Expedited Effective Date.
*
*
The Council declares that this legislation is 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
Nancy Floreen, President, County Council
Approved:
Date
40
41
42
43
Isiah Leggett, County Executive
This is a correct copy ofCouncil action.
Date
44
45
46
47
Linda M. Lauer, Clerk of the Council
Date
F:\lAw\BILLS\1 015 Fuel Energy Tax\BiII1.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:\LA\V\BILLS\1015 Fue! Energy Tax\LRR,DOC
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OFFTCE OF THE COT.JNTY EXECUTIVE
ROCKVILLE. MARYLAND 20850
lsiah Leggett
County Executive
MEMORAKDUM
March 18,2010
""C)
,.'"
.
,.
\
"'''''
TO:
FROM:
SUBJECT:
Nancy Floreen, Council President
Isiah Leggett, County
ExecUtiVe~tJ}~~'-I--­
)
~7
-_.;
-(
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 RepOli for the bill. A Fiscal Impact Statement will be transmitted to Council soon.
The BRFA 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 Govemment 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 stormwater 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 tax 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 tax). 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 FYll 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 of providing 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.
"I
The Attorney General concluded that
all ofthose bills were consistent with the one subject rule because the provisions of the bills were
"clearly germane to the single subject of financing 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
I
See May 19, 2005 memorandum from Attorney General
J.
Joseph Curran, Jr. to Governor Robert Ehrlich regarding
House Bill 147 (2005).
(j)
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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.
2.
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.
This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk of the Council
Date
F:\LAW\BILLS\lOll 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, 20lO)
(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)
No.1
No.2
No.3
No.4
No.5
No.6
Liquefied petroleum gas (per pound)
TAX RATE
$0.0072924198
$0.0628010617
$0.0822605134
$18.6267531744
$0.0899987212
$0.0933631594
$0.0933631594
$0.0955500442
$0.0974004852
$0.0995873700
$0.0135686
(b) For fue I-energy transmitted, distributed, manufactured, produced, or supplied for
non-reside ntial 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)
$0.0193251926
$0.1664230814
$0.2179903605
$49.3578373320
$0.2384966112
$0.2474123724
$0.2474123724
$0.2532076172
$0.2581112858
$0.2639065305
$0.0359568595
F:\LA W\BILLS\l 0 15 fuel energy tax\
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SCHEDULE C-2
Revenues Detailed By
Agency
OTHER
SUMMARY
j
GRAND TOTAL ALL
ES
-0.7%
SCHEDULE C-3
Revenues Detailed By
Agency,
Fund and Type
Actual
Budget
Estimated
Recommended
FY09
FYI 0
FYl0
FYll
%Chg
Bud/Ree
TAX SUPPORTED
MONTGOMERY COUNTY GOVERNMENT
County General Funcl
Taxes
Property
Taxes
1,103,000,368
1,217,556,500
2.6%
1,211 ,041 ,980
1,249,091,200
3,767,095
0.5%
4,481,190
4,454,790
4,502,330
-142,295,619
.168,942,072
.167,612,040
0
-
0
-168,814 ,443
-'
·2,616,227
-4,026,150
0.7%
-4,000,000
-4,000,000
.952,394
-1,867,619
-1,896,331
1.5%
-3,197,651
PenaltIes and In;;.:te:;.cr;;.;es:;.ct...::o.:c.n...;.T;;.;ax;;.:es:;;.;..._ _ _ _ _ _ _ _
. . ;1;.t. ;,3:.;7.:;.0;.t. ;I
1:..:2:..:2'--­_ _..:.1t...;,4..:.7.;..9,!.:3:..:5.::.6_ _ _.:.!1
,:..:.4:..79;.!,.::.3:::56=--___1;L.4..:..7....;8:!.,0::.9....;8:....._....
-.::.0.:.:.1.:.:.,%
Property Tax Electric Deregulation
a
555,345
555,345
277,673
-50.0%
Prior Year Tax
45,962
2,039,721
2,039,721
2,039,721
Other
Taxes
County Income Tax
1,291,716,935
1,214,770,000
1,160,880,000
-4.4%
1,094,555,000
Real Property Transfer Tax
64,771,739
75,650,000
16.4%
64,970,000
68,670,000
26.3%'
Recordation Tax Premium
8,221,000
6,509.000
Recordation Tax
42,437,217
51,880,000
46,121,000
51,020,000
·1.7%
Solar Tax Credit
-500,000
·500,000
-500,000
­
--
~
EnergyTax
129,328,307
130,360,000
132,194,000
185,120,000
42.0%
Telephone Tax
30,906,025
32.840,000
29,542,000
30,589,000
·6.9%
Hotel/Motel Tax
16,829,254
20,014,000
17,353,000
-13.3%
15,813,000
Admissions Tax
2,169,201
2,130,000
2,043,000
·4.1%
2,058,000
TOTAL TAXES
2,540,477,985
2,574,275,421
2,613,028,098
1.5%
2,433,2
J
4,50 1
Countywide Tax
Storm
Draina~e
Tax
Tax Rebate
Income Tax Offset Credit
New Business Incentive Tax Credit
County Homeowner Tax Credit Program
°
°
°
°
°
Licenses
&
Permits
Business Licenses
Hazardous Materials Permits
Traders licenses
Miscellaneous - Landlord·Tenant
Clerk of the Court Business Licenses
Burglar Alarm Licenses
Other Business Licenses
Public Health licenses
683,432
735,338
155
239,386
77,740
4,467,736
2,263,481
165,925
65,358
248,566
2,800
351,890
700,000
780,000
15,000
215,000
67,030
4,414,390
2,171,920
125,000
67,000
300,000
928,000
780,000
215,000
70,000
4,553,610
2,209,650
185,000
67,000
250,000
700,000
780,000
­
­
­
­
°
215,000
67,000
4,549,260
2,209,650
185,000
67,000
250,000
°
­
0,0%·
3.1%
1.7%
48,0%
-16.7%
i
Non-Business Licenses
Residential Parking Permits
Marriage
License\Ceremon~
Fees
Marriage Licenses·Battered Spouses
Other Non-Business Licenses
Pet Animal Licenses
°
277,040
°
369,300
°
369,300
­
33.3%
7J·2
Budget Summary Schedules:
Revenues
FYll Operating Budget and Public
SelYices
Program FY11-16
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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:
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)
TAX RATE
$0.0085513547
$0.0736427923
$0.0964616479
$21.8424032568
$0.1055357497
$0.1094810
114
$0.1094810114
$0.1120454315
$0.1142153254
$0.1167797455
$0.01591] 0610
(b) For fue I-energy transmitted, distributed, manufactured, produced, or supplied for
non-reside ntial purposes:
FUEL-ENERGY
Electricity (per kilowatt hr)
I" .......
a ..
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\Loca\ Settings\Temporary Internet Files\OLK396\
@
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Questions Related to the County Executive's Proposed Fuel/Energy 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 FYI1 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 FYl1 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 anl0tmt
reflected on the customer's bill under the County line item is for the MD gross receipts tax and MD
PSC assessment fee. Additional amOlmt 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 Fuel/Energy 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/quarterly) to the COlmty 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 FYII, 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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FuellEnergy Tax Data Tables
April 15,
2010
Annual Tax Revenue, FY03-FYll ($
in
millions)
*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
Cons
Residential
$99
$161
~Slnere';e
$62
,f~lnerease
63%
$2,618
$4,157
Non-Residential
$1,539
59%
*Projected
**Projected based on the County Executive's March 25
th
proposed tax increase
Source: Department of Finance, OLO Analysis
Total Number of Consumers, FYIO and FYll
Category
Residential
Non-Residential
......
'
..
'
"'FYI0
362,000
36,737
,FYllProjeeted
367,000
37,977
Source: Department ofFmance
Percentage of Total Tax Revenue
by Category, FYIO and FYll
• Non-Residential
72.8%
72.8%
Total
100%
100%
*Projected
Source: Department of Finance - Based on the average of the
prior four fiscal years
Annual Tax Revenue, FY03-FYll ($ 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
Fuel Type
kWh
Electricity
Therm
Heating Fuel
Total
Average Monthly Increase
Non-Residential
Units
Consumed
12,808
624
Tax Rate
0.005224
0.044986
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
kWh
Therm
Average Monthly Increase
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
Fo
Total
Difference
1
%
I
$4,636.851
$1,804.32
$1,039.261
$404.40
$5,676.121
$2,208.73
$184.06
Some Examples
Current
Tax
$89.68
$47,075.00
$3,537.86
Proposed 63.7% Increase
For Each
Total
Difference
1% Increase
$57.12
$146.80
$0.90
$77,061.78
$29,986.78
$470.75
$1,040.13
$4,577.99
$35.38
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--,)
~
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Page 1 of2
Guthrie, Lynn
~~~~~~~~~~--------~------~------=-------------------~,-"-
From:
Sent:
To:
Floreen's Office, Councilmember
Monday, April 19, 20102:26 PM
Montgomery County Council
.. ."
(0;::
~
-5~f
Subject: FW: Energy Tax and SS clean and safe
j--'~
056085
:~:::
:;:;
,~,,~
C)-::
r:: ::-
!"
-----Original Message----­
From: Nona
L.
Olson [mailto:nlo@cclandco.com]
Sent: MondaYI April
19
1
2010 1:43 PM
To: Floreen's Office, Councilmember; Andrew's
Office
l
Councilmember; Berliner's
Office
l
Councilmember; Eirich's
Office
l
Councilmember; Ervin's
Office
l
Councilmember; Knapp's Office, Councilmember; Leventhal's
Office
l
Councilmember; Navarro's
Office
l
Councilmember; Trachtenberg's Office, Councilmember
Cc: 'Jane Redicker'
Subject: Energy Tax and
SS
clean and safe
Good afternoon Councilmembers
Montg 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 needs.to 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
nfo@ccfandco.com
412012010
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MONTGOMERY COUNTY ENERGY TAX (MCET)
0.0141501
Propei'tyAddre.ss' :-Ibilling period ... KWH used existin
MCET
2 Wise
Circle
0.022661419
existing charge . pro osed
MCET
new charge.lannual increase
.'
.
11/28110-2/24/10
2/4/10-3/5/10
':':'.,
492978
337448 '
383222
0.0141501
0.0141501
0.0141501
0.0141501·
0.0141501
. $6,975.69
":,;,'
0.022661419
0.022661419
0.022661419
.'. $11,171.58
$7,647.05
·$8,6e4~351
$50,350.71
$34,465.56
$39,140.69
$14,217.31
$26,657.52
8401
CtAve
.
,;"
',.'
..
2
Bethesda Metro... ·
1/4/10-2/1/10
'.',
.,.'
'"'.
.
::::~~;2·AV.
>
:~::::::J
:::
I
1
". $1,969.691
$3,693.171
0.022661419
0.022661419
I· '
$3,154.471
1 .... $5,914.631
··$164,a31.80
Q
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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]
Businesses push back
against 64 percent -- or more -- energy tax hike
By:
Alan~S.!lde~mJlJ!
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 Itwould not be surprised
lt
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
">
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 of building
Difference
$57.12
$1,040.13
$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
">
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.comipt/cpt?action=cpt&title=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-halftimes 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 of the 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.
asudennan@washingtonexGl1ziner.cQm
More from Alan Suderman
BJ:l..[i.vesSeS121Jsh_back agl,iinst
64n~rcent
=:_QLffiQKt;_==_t;J}ergy
t<:1xJJi.k~
Montgomery pay increases much higher than private sector
Leggett approves pay increases for helicopter police
Montgom~ry_CQunty
unioI!.§ at odds over furlough plan
CASA fights againsiliudget cJJ§
Topics
Washin1!ton Examiner,
l1<,e
Leggett, energy taxes, Ginanne Itl,iJiano , Greater
Betl1esda-Ch~Chase
Chamber of
Commerc~
, Lisa F<ldden , Montgomery County Chambt';f of Commerce
http://www.printthis.clickability.comlptlcpt?action=cpt&titk=Businesses+push+back+agai...
4/20120
I 0
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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:
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)
TAX RATE
$0.01044759U
$0.0899728678
$0.1178517384
$26.6858928000
$0.1289379960
$0.1337581080
$0.1337581080
$0.1368911808
$0.1395422424
$0.1426753152
$0.0194392926
(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)
$0.0276865224
$0.2384284834
$0.3123071068
$70.7132340000
$0.3416856894
$0.3544589862
$0.3544589862
$0.3627616292
$0.3 697 8694 24
$0.3780895852
$0.0515141254
\\CCL-FO 1\Data\DEPT\Other_Depts\OLO\Leslie'-.Budget\FY
II
\Fuel-Energy Tax Increase\
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Fuel/Energy Tax Data Tables
April 29, 2010
Annual Tax Revenue, FY03-FYll
($
in millions)
$72.2
Non-Residential
$94.1
$129.3
$96.2
$132.2
$192.8
$64.3
$174.6
$238.9
714%
859%
815%
$265.0
*Projected based on current
tax
rate
** Projected based on the County Executive's Apri122
nd
proposed tax increase
Source: Department of Finance, OLO Analysis
r ­__________
Average Annual Tax Bill, FY09-FYll
~
~~_r~~~~~----~~~
** .
S
lIi~~$~:·
..
%
Increase ".
$98
99%
94%
$2,459
Residential
$5,077
*Projected
**Projected based on the County Executive's Apri122
nd
proposed tax increase
Source: Department of Finance, OLO Analysis
Total Number of Consumers, FY10 and FYll
Category
Residential
Non-Residential
FYIO
362,000
36,737
FYll Projected
367,000
37,977
Source: Department of Fmance
Percentage of Total Tax Revenue
by Category, FYIO and FYll
~~--~~~~
C.tegoiya<;j~ji:
-~----------~
FYll~~ici:;~;
,.
Residential
Non-Residential
27.2%
72.8%
27
.2%
72.8%
Total
100%
100%
*Projected
Source: Department of Finance - Based on the average of the
prior four fiscal years
Annual Tax Revenue, FY03-FYll
($
millions)
Non­
$18.2
Residential
$26.1
$73.6
Total
*Projected
Source: Department of Finance
$86.5
$118.8
$86.1
$118.3
$94.1
$129.3
$96.2
$132.2
$134.7
$185.1
$157.9
$192.8
$217.0
$265.0
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Summary of PEPCO Rate Schedules
Non-Residential Rate Schedules
General Service
Temporary or Supplementary Service
Time Metered Medium General Service
Time Metered Medium General Service
Time Metered Medium General Service
Time Metered Medium General Service
Time Metered General Service
Low Voltage
Type II
Low Voltage - Type III
Primary Service - Type II
Primary Service - Type III
Time Metered General Service - Low Voltage
Primary Service
Time Metered General Service - High
Voltage
~.
.
~d
Rapid
~ransit
Service
lectnc VehIcle ServIce
Outdoor Lighting Service
Street Lighting Service
Charges for Servicing Street Lights Served from Overhead Lines
Charges for Servicing Street Lights Served from Underground Lines
• Telecommunications Network Service
Cogeneration and Small Power Production Interconnection Service
Standb
y
Service
Source: PEP CO Rate Schedules for Electric Service in Maryland, March 1, 2010
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April 27, 2010
MEMORANDUM
TO:
The Honorable Nancy Floreen, Chair
Transportation, Infrastructure, Energy & Environment (T &E)
Montgomery County Council
The Honorable Duchy Trachtenberg, Chair
Management and Fiscal Policy (MFP)
Montgomery County Council
FROM:
SUBJECT:
Jacob Sesker, Planner Coordinator (301-650-5619)
Summary of Economic Issues-Fuel/Energy Tax
The proposed budget includes additional revenues of approximately $100 million attributable to
an increase in the Fuel/Energy Tax. As a matter of perspective, that $100 million gap is
equivalent to more than 8% of the total countywide real property tax revenues. That gap will be
closed by increasing taxes or decreasing spending) or some combination of the two; however,
actual increases in property tax are unlikely. To the extent that the gap is partially closed by tax
increases, those increases will be in the form of increases to excise taxes
2 •
The Executive has now proposed an increase of 100% in the Fuel/Energy tax rates, which
follows the earlier proposals to increase the rates by 39.6% and then 63.7%. For each of the three
successive proposals, the Executive has proposed increasing the rates by the same percentage for
all fuel types and for all end users.
The following represents a brief outline of the economic issues raised by this proposed tax
increase. In brief, those issues are uniformity/equity, and timing (onset and sunset). Further
discussion, and possibly analysis, is almost certain to occur over the next two weeks. Answering
these questions will likely require further coordination between the County Executive, Council
staff, and the Planning Department.
I
An
issue not addressed in this memo is the economic impact of reductions in government services, some of which
do negatively impact businesses and the overall business climate in a jurisdiction.
Excise taxes are taxes on the exercise of a privilege (e.g. distribution of energy, consumption of alcohol, etc.). In
contrast to property taxes, there is no Maryland requirement that excise taxes be uniform (i.e. that commercial and
residential rates be the same). In addition, there are no Charter limitations on increases in excise taxes. Excise taxes,
like all taxes, are primarily tools for raising revenue. Excise taxes may often be perceived as a way to influence
behavior as well-for that reason many excise taxes are referred to as "sin taxes."
2
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Uniformity
a. Commercial versus residential
The question raised by many members of the business community in compelling written
testimony submitted at the April 21
st
public hearing was whether the increase in the Fuel/Energy
Tax unfairly burdens the business community. If the County leans more heavily on the
Fuel/Energy Tax to raise revenues, the portion of tax revenues (all sources, i.e. property, income,
development impact, and other excise taxes) generated by commercial uses will increase. A
question for further analysis is whether that increase will be exacerbating an existing inequality
between commercial and reside?-tial, or narrowing an existing gap.
In this case, the current Fuel/Energy Tax rates for commercial users are 2.65 times higher than
the rates charged for energy distributed to residential users
3.
Because the Executive has proposed
equal rate increases for residential and commercial, that relationship would remain the same if
the proposal were adopted.
Alternative distributions of the increase could fall anywhere within a range. The examples below
are intended to illustrate alternative distributions of the burden where the total amount of revenue
raised by the tax remains constant:
E
xecu
ti
ve
t
S
P
roposa
I
FYll
Consumers
Residential
Commercial
Total-All Uses
367,000
37,977
FY 11 Average
Tax Paid
$198.93
$5,236.56
FY 11 Projected
Revenue
$73,005,747
$198,868,900
$271 ,874,646
% Rate Increase
100%
100%
.
t
11M
am
t '
FYI0 C
ommercla
lRae
.
am
Example
·
FYll
Consumers
Residential
Commercial
Total-All Uses
I
FY 11 Average
Tax Paid
$469.86
$2,618~28
FY 11 Projected
Revenue
$172,440,197
$99,434,450
$271,874,646
% Rate Increase
372%
0%
I
367,000
37,977
E xample
12M'
t '
FY 10 R
eSI en
t'
I
R
ate
'd
la
am am
FYll
Consumers
Residential
Commercial
Total-All Uses
367,000
37,977
FY 11 Average
Tax Paid
$99.46
$6,197.74
FY 11 Projected
Revenue
$36,502,873
$235,371,773
$271,874,646
% Rate Increase
0%
137%
·
For comparison, in Fairfax County the rate charged to commercial users is 1.25 times higher than the rate
charged to residential users.
3
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Example 3: Achieve
SO/50
Split Overall
I
,
Residential
Commercial
Total-All Uses
FYll
Consumers
367,000
37,977
FY 11 Average
Tax Paid
$370.40
$3,579.46
FY 11 Proj ected
Revenue
$135,937,323
$135,937,323
$271,874,646
% Rate Increase
272%
37%
Example 4: Split Executive's Proposed Increase
SO/50
FYll
C
onsumers
Residential
Commercial
Total-All Uses
367,000
37,977
FY
11
Average
T
ax P'd
at
$288.41
$4,371.81
FY
11
Projected
R evenue
$105,846, I 06
$166,028,540
$271,874,646
% Rate Increase
190%
67%
h. Multi-family versus single1'amily residential
A potential question for further consideration is whether an amended Fuel/Energy Tax should
mandate that energy distributors treat multi-family residential dwellings as residential dwellings
for purposes of charging the FueVEnergy Tax.
PEPCO charges commercial rates to "master metered" multi-family dwellings (condos and
apartments). In essence this means that some residents of multi-family structures are paying a
Fuel/Energy Tax rate that is 2.65 times higher than nearby residents of single-family structures.
Residents of multi-family dwelling units have lower incomes than residents of single-family
dwelling units, and therefore have less disposable income with which to absorb a tax increase.
Timing
Two possible issue for additional discussion are: (1) whether to introduce this increase gradually,
and (2) the timing and wording of a sunset provision.
The Executive has proposed that the increase be effective on May 1,2010, and that the entire
proposed increase sunset at the end ofFYl2 (i.e. the increase would be effective for 26 months).
Excise taxes are first and foremost tools for raising revenue. The revenue is needed now, and as
such the Executive has proposed that the rate change be effective immediately.
Sudden increases in regulatory costs (e.g. taxes) often result in one party bearing the entire
unforeseen burden. That burden might fall entirely on the landowner or entirely on the tenant,
but in either case the parties might have allocated costs and risks differently in negotiating the
lease if the possibility of a significant increase in a specific cost had been apparent at the time of
the lease negotiation. While the economy can adjust to these changes over time, adjustments in
the short-term are difficult.
Sunset provisions may provide clarity for parties who are negotiating long-term leases in FY 11
and FY12 regarding their costs/risks in the short-term and in the long-term. Clarity and a
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commitment to sunset certainly would aid in the negotiation oflong-tenn leases that are to occur
during the next two fiscal years.
An
additional issue discussed in testimony was concern that consumption would change and that
therefore revenues are not likely to meet projections. While revenues often exceed or fall short
of projections, energy consumption is relatively inelastic and is unlikely to change significantly
during the next 26 months as a result of this tax increase.
cc:
Steve Farber
Leslie Rubin
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Comparison of Fuel/Energy Tax Rates, Current and FYll Proposed
operating budget do not
UllSLlUgUlIHl
**
Montgomery County Executive's April 22°(\ proposed
tax
increase.
***
Comparison of both Montgomery County residential and non-residential rates with Prince George's County's single rate.
Sources: Montgomery County Executive's Proposed FYil Operating Budget and Apri122, 2010 FYIO and FYII Budget Adjustments; Baltimore
City Fiscal 20 II Preliminary Budget Plan; Prince George's County Proposed Operating Budget Fiscal Year 20
11;
Fairfax County Code; Fairfax
County Website; Fairfax County FY20 II Advertised Budget Plan; District of Columbia Code; District of Columbia Website; District of Columbia FY
2011 Proposed Budget and Financial Plan; Maryland Association of Counties (MACO) FY 2010 Budget and Tax Rates Survey
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Calculation of Monthly Fuel/Energy Tax for Electricity Usage by Actual Montgomery County Businesses and Homes
Business and home examples provided by Charles Washington, PEPCO's Manager of Government Affairs. Tax calculations based on the Montgomery
County Executive's proposed fuel/energy tax rate on April 22, 2010 and on the proposed FY11 rates in other jurisdictions.
Examples of Monthly Electricity Tax - Non-Residential
Bethesda
----------­
~~~~-
Office Building
Grocery Store
Apartment Building
Non-profit - Serving Children
Restaurant
Ice Cream Parlor
Coffee Shop
------­
Rockville
--------­
~-
r-~~~~
392,488
365,876
232,721
194,347
129,920
28,640
9,960
8,118
1,584
$10,867
$10,130
$6,443
$5,381
$3,597
----------­
$5,049
$4,706
--------­
$2,717
----------­
$2,563
----------­
$2,331
--------­
$2,533
$1,611
$1,345
-------­
~~~-
$2,389
$1,519
$1,269
-------­
$2,173
$1,382
$1,154
-------­
Silver Spring
Bethesda
not identified
Silver Spring
Germantown
Rockville
Takoma Park
----------­
$2,993
$2,500
$1,671
$368
$128
~
~~~~~~~~
~
~
~
~-i
----------­
$793
$276
$225
$44
--------­
$899
$198
$67
$56
$11
$848
$187
-------­
$772
----------­
$170
----­
Florist
$104
$20
$65
$53
$10
$59
$48
$9
Examples of Monthly Electricity Tax - Residential
1,428 square feet
3370
1868
----------­
-~~~
$35
$20
$12
$7
$3
HOU~
Potomac
--­
~~~~
7,150 square feet
4 BR, 3.5 BA
3,600 square feet
789 square feet
$24
$13
$8
$5
$2
$23
$13
$8
$4
$2
$20
$11
$7
House
Apartment
Rockville
Bethesda
1180
---­
Ho~s~c;aithersburg
650
258
$41
$2
I
$1
$1
Sources for both tables: Businesses and electricity usage taken from April 20, 2010 written testimony from Charles Washington, PEPCO Manager of Govermnent Affairs;
Montgomery County Executive's Proposed FYII Operating Budget and April 22, 2010 FYIO and FYII Budget Adjustments; Baltimore City Fiscal 20 II Preliminary
Budget Plan; Prince George's County Proposed Operating Budget Fiscal Year 2011; Fairfax County Code; Fairfax County Website; Fairfax County FY20 11 Advertised
Budget Plan; District of Columbia Code; District of Columbia Website; District of Columbia FY 2011 Proposed Budget and Financial Plan; OLO analysis
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