Montgomery County Council Votes on Fuel/Energy Tax Reduction

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On May 13, the full Montgomery County Council voted against a proposed reduction to the fuel/energy tax.

AOBA's testified on a resolution to amend the fuel/energy tax rates (with proposed rates) which proposes reducing by 10 percent in FY16 the revenue received from the 2010 increase to the fuel/energy tax rates. This followed AOBA’s April 15 testimony in support of reducing the fuel/energy tax rate as part of the proposed FY 16 budget. The fuel/energy tax adversely impacts the County's non-residential consumers, including AOBA members, who account for 68% of the total revenue the County receives from the fuel/energy tax.


WHAT DO WE KNOW ABOUT THE ENERGY TAX?

  • It is a tax that adds $8,000 to $15,000 a month to the costs that office building tenants must pay.
  • Results in rent pressure for multifamily properties where utility costs are included in the rent, and the County has many such buildings.
  • The energy tax is now the third largest tax revenue source for the county.
  • The disparity in the amount paid by the nonresidential sector is unsustainable and clearly at odds with the County’s stated economic and business goals. The County’s business attraction and retention efforts continue to be undermined by requiring businesses to shoulder more than two-thirds of the County’s staggering energy tax.
  • There is no nexus between the tax and any stated County public policy. The “fuel/energy tax” name itself is a misnomer as there is no connection to the County’s energy policy.