T&E/MFP ITEM 1-2
April 29, 2010
Transportation, Infrastructure, Energy and Environment!
. Management and Fiscal Policy Committee
Faden, Senior Legislative Attorney
Leslie Rubin, Legislative Analyst, Office of Legislative Oversighttt.i
Fuel-Energy Tax - Rate and Resolution to
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.
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
The Executive's April 22 proposed rate schedule supersedes the rate increases proposed both
proposed operating budget (©IO) and on March 25 (©I2). For data on the impact of the proposed 100%
increase, see ©22.
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.