Montgomery County officials already are eyeing the energy tax as a way to reduce the county’s projected budget shortfall for fiscal 2013. Officials predict a budget shortfall of about $140 million to $150 million in fiscal 2013, according to Joe Beach, director of the county Office of Management and Budget. But extending the current energy tax rate, which is set to expire next June, would cut the hole to less than $40 million.
The two-year increase to the energy tax — 150 percent for residents and 60 percent for businesses — brought in $110 million this fiscal year and is expected to bring in a similar amount in fiscal 2012, which starts July 1.
“It’s too early to say whether we need to remove that or not,” said County Executive Ike Leggett. “There still may be other areas that we can make reductions or cuts.”
But, he added, “this is probably preferable” to other options.
County Council members say they are reluctant to extend the tax increase.
“I would be very concerned about continuing the increase in the energy tax,” said Councilwoman Nancy Floreen, D-at large.
The tax was an “imposition” placed on local businesses and residents to help the county through a “short-term budget crisis,” said Councilman Roger Berliner, D-Bethesda, adding that he expects the tax increase to expire as planned. The council had to cut $300 million for fiscal 2012.
But if the tax expires, the council will have to find $110 million in additional revenue or find a way to cut that amount from the budget, said Councilman Marc Elrich, D-at large. “I’m hoping that revenues are better and it would be really easy to say, ‘Yeah, I want to get rid of the energy tax.’ ”
Local businesses, which have forked out hundreds of thousands of dollars in extra taxes, plan to fight attempts to extend the measure. Both the Greater Bethesda-Chevy Chase Chamber of Commerce and Silver Spring Chamber of Commerce are gearing up to lobby against it.
