Nancy Floreen wants to increase residents' share of new energy tax

Montgomery County Executive Ike Leggett is banking on an energy tax hike to help compensate for a $168 million decrease in income tax revenues, part of a much larger $1 billion budget gap. Leggett wants to double the energy taxes, a plan that would cost some of the area’s larger businesses — think coveted biotechnology firms — hundreds of thousands of dollars more a year. (The move is not unprecedented in trying budget times. Baltimore City Mayor Stephanie Rawlings-Blake also wants to increase energy taxes, but her proposal would cost residential customers an additional 60 cents a month).

Under Leggett’s plan, the county would bring in about $192 million in fiscal 2011 from the energy tax to businesses, a lot more than the $88.6 million Washington said Pepco collects in distribution rates from Montgomery County businesses each year. The rate is far from set. Now Council President Nancy Floreen is saying that the council could tinker with the formula, spreading more cost from businesses to residents.

The way it sits now, Montgomery’s energy tax falls mostly on the shoulders of businesses, which pay about 2.65 percent more than residential customers. Business customers pay 1.3843 cents per kilowatt of electricity and 11.9214 cents per therm of heating fuel a year, compared to residential customers, who pay a little more than half a cent per kilowatt of electricity and a little less than half a cent per therm of heating fuel.

Leggett had initially planned on seeking a 40 percent energy tax increase, and then bumped it up to 63.7 percent before deciding to ask the County Council to approve doubling the tax. Residents, businesses and the county’s largest power distributor, Pepco, testified against the requested 63.7 percent increase in a hearing last week. Under that plan, the average residential customer would see an increase in energy tax payments to $161, up from $99 a year; businesses would on average pay $4,157 a year, compared to the $2,618 they pay now. If Leggett gets to double rates, residents would pay $198 a year and businesses would pay $5,236.

According to Maryland Politics Watch, Pepco representative Charles Washington testified applying the 63.7 percent rate hike to the bills of some customers: As demonstrated below using actual randomly selected commercial accounts, this increase will have a real impact on County businesses. One restaurant in Silver Spring will see an increase of over $3,000 a year. A hotel in Bethesda will see a tax increase of approximately $41,000 a year. The County’s successful Biotech companies will see increases of hundreds of thousands of dollars of year, with at least one projected to see an increase of over half a million dollars. SOURCE: Maryland Daily Record

Md. cities to raise property taxes

Cities across Maryland are slashing services to make up for state funding losses and finding out that the cuts just won't be enough. Gaithersburg is considering a property tax increase for the first time in four decades, and Rockville is mulling fee increases.

"Our main objective right now is to get to 2015," said Gaithersburg finance director Harold Belton. "And we're looking at anything that will help us sustain the city through 2015."

Maryland cities' main source of funding comes from the state in the form of highway user revenues -- money allocated for transportation infrastructure, construction and building maintenance. The Maryland General Assembly slashed that funding by $244.5 million -- or 90 percent -- by extending cuts from last year into fiscal 2011. Belton said Gaithersburg is considering a 5-percent property tax increase, which would cost residents about $250 more annually on a house appraised at $495,000. The increase would generate about $5 million in a year. Rockville cut enough fat out of the fiscal 2011 budget to avoid tax increases, but fee increases are still being considered, said city spokeswoman Marylou Berg.

"This is an enormous hit," she said, adding that Rockville is set to receive $240,000 in state funding next year, compared with $2.67 million in fiscal 2009.

Montgomery County Executive Ike Leggett's proposed energy tax increase also would affect residents in Gaithersburg and Rockville. Leggett's plans could raise county residents' utility costs by an average of $60 annually. Officials in Maryland's third-largest city, Bowie, have proposed a 2.5-cent property tax rate increase to raise $1.6 million in the next year. City Manager David Deutsch said Bowie budget leaders have exhausted all their optionswhen it comes to raising revenue. Two-thirds of the city's $60 million proposed budget for fiscal 2011 relies on city-generated revenue -- a 20 percent increase from last year.

Much of that revenue will be coming from a speed camera program Bowie has the authority to expand, thanks to new legislation. But Maryland's cities are left with relatively few options when it comes to raising revenues, and the Maryland Municipal League wants to change that. Director Jim Peck said he will push Annapolis next year for more revenue-raising authority on behalf of Maryland city governments -- additional fees and taxes could be near, with the state's local cuts set to continue into 2012. SOURCE: Washington Examiner

Next Taxpayers League on 4/22

Next meeting: April 22, 2010 - 7:30 - 9:30 p.m
5th floor conference room (TENTATIVE), Stella Werner Council Office Building,
100 Maryland Ave., Rockville MD 20850 Montgomery County Taxpayers League

Bethesda weekend parking: Still free, still too crowded

Montgomery County Executive Ike Leggett wants to increase parking tickets to help close the County's $800 million budget gap. If the County is looking for parking revenues, it should also look at its overflowing weekend parking in Bethesda.

Photo by Daquella manera.

There are two public parking lots most convenient to most shops in Bethesda: the surface lot at Woodmont and Bethesda Avenues, and the garage inside Bethesda Row with entrances on Elm Street and Bethesda Avenue. Nearby are many pay garages charging $7 for an evening, but the public garages are free, even on busy Saturday nights.

As you might expect, the Woodmont lot is always full on weekends. Any time I've tried to park there, there are typically 3-4 other cars circling around looking for spaces. As soon as someone gives up, someone else comes in. In the garage, it's almost as bad during the day, and just as bad at night. Worse yet, the garage gets backed up with traffic from drivers crawling up the ramps and then, in some cases, right back down again.

SOURCE: Greater Greater Washington

Millionaire tax drops payment from $106M more to $257M less

Illinois Governor Pat Quinn is the latest Democrat to demand a tax increase, this week proposing to raise the state's top marginal individual income tax rate to 4% from 3%. He'd better hope this works out better than it has for Maryland. We reported in May that after passing a millionaire surtax nearly one-third of Maryland's millionaires had gone missing, thus contributing to a decline in state revenues. The politicians in Annapolis had said they'd collect $106 million by raising its income tax rate on millionaire households to 6.25% from 4.75%. In cities like Baltimore and Bethesda, which apply add-on income taxes, the top tax rate with the surcharge now reaches as high as 9.3%—fifth highest in the nation. Liberals said this was based on incomplete data and that rich Marylanders hadn't fled the state. Well, the state comptroller's office now has the final tax return data for 2008, the first year that the higher tax rates applied. The number of millionaire tax returns fell sharply to 5,529 from 7,898 in 2007, a 30% tumble. The taxes paid by rich filers fell by 22%, and instead of their payments increasing by $106 million, they fell by some $257 million. SOURCE: Wall Street Journal

Delegate Roger Manno proposes tax for pensions

A bill that would attempt to bring the state’s employee pension fund into balance is getting plaudits for its aim, but was panned Tuesday for its plan to pay the cost using two controversial tax proposals. Del. Roger Manno, D-Montgomery, presented a proposal to the House Appropriations Committee, which would use an extension of the state tax surcharge for incomes above $1 million and a controversial corporate tax proposal known as combined reporting.

Manno said at the hearing that he realized that the tax proposals would be unpopular, but he thought he should suggest something to deal with the state’s mounting pension liability.

“I’m sure there are better solutions out there,” he said. “But my goal is to illuminate the problem.”

The state has been falling further and further behind in its obligations to retired workers, teachers, lawmakers and police. At the end of last fiscal year, it stood at $28.6 million, or about 65 percent funded. The 6.25 percent millionaire’s tax has been on the books since 2008, and is scheduled to expire at the end of this year.

Del. Wendell Beitzel, R-Western Maryland, said he thought the bill put too much of a burden on businesses. Firms would effectively be paying for more generous benefits than they provide to their own employees, he said. Nobody spoke in favor of the bill at the hearing, other than Del. Manno. However, barely anybody made a comment about it without first complimenting the delegate for his goal of getting the state caught up on pensions.

SOURCE: http://www.marylandreporter.com/page550523.aspx