Montgomery County taxpayers will face higher taxes starting July 1, after county lawmakers approved a property tax increase and tentatively approved an extension of an elevated energy tax rate. The County Council voted 8-1 on Wednesday to increase property taxes by 4.5 cents to 99.1 cents per $100 of assessed value. The average resident would see about a $4 increase on his property tax bill, which allows the county to continue earning roughly the same amount of revenue even though property values have dropped $10 billion since fiscal 2011.
Lawmakers also tentatively approved 8-1 an extension of the county’s elevated energy tax rate. The rate will be 10 percent below the increase adopted two years ago– in what Council President Roger Berliner, D-Bethesda, called “a modest first step in reducing the energy tax” — but more than 140 percent above what it was three years ago.
The tax was temporarily increased 155 percent for residents and 60 percent for businesses in 2009. With the increase, the average resident’s energy bill jumped from $92 to $246 a year and the average business’s bill jumped from $2,772 to $4,395, according to a County Council analysis. Though the tax was set to return to 2009 rates on June 30, Wednesday’s decision extends the elevated rate — though slightly less elevated — indefinitely.
With the change, the average resident is likely to still pay about $230 a year, while the average business is expected to pay about $4,200.
Council members saw both tax rates as concessions aimed at helping their residents. In the case of the property tax, the County Charter allows the county to collect $26 million above the tax revenue the new rate is expected to earn. Meanwhile, the new energy tax rate means $11.4 million that the council has to pull out of another part of the budget.
“We feel that our residents have been — you know, they’re at their limit, pretty much in terms of taxes,” Councilwoman Nancy Navarro, D-Eastern County, said when describing the property tax rate.
But taxpayers see a different perspective.
“The energy tax increase has cost Montgomery County hospitals a combined total of nearly $1 million annually,” Holy Cross Hospital President and CEO Kevin Sexton and Medstar Montgomery Medical Center President Peter Monge wrote in a letter to the council on behalf of a coalition that also includes Adventist HealthCare and Suburban Hospital. “The increase should [expire] as promised.”
