Two years ago, at the height of the Great Recession, Montgomery County Executive Ike Leggett requested a “temporary” tax hike on energy. He assured County Council members that raising the energy tax already paid by residential customers by a whopping 150 percent (60 percent for commercial enterprises) was absolutely necessary to balance the county’s overextended budget. To make this bitter medicine go down, council members added a sunset provision. The unpopular measure is currently set to expire on June 30th. However, as Washington Examiner reporter Rachel Baye has reported, Leggett now wants to make the energy tax hike permanent. Having proposed the sunset provision to persuade wavering council members in 2010, Leggett has now included an indefinite extension in his $4.6 billion budget for fiscal 2013.
Six county employee unions with pay raises on the table support making this tax a permanent fixture on the county’s balance sheet. Claiming that there’s little “fat” remaining in the budget, Council President Roger Berliner recently told Montgomery Chamber of Commerce officials — who firmly oppose the extension — that council members would have to cut $110 million to keep their word to the public. That should be easy, since Leggett’s 2013 budget also calls for $199 million in new spending.
Council members may recall that in December 2011, Stephen Fuller, director of George Mason University’s Center for Regional Analysis, told them that Montgomery County had hardly created any net new jobs during the previous decade, even as the Washington region as a whole added 420,000 during that same time period — the most of any major metropolitan area in the U.S. “It kind of looks like you’re in the defensive mode a lot of the time,” Fuller told them. No wonder, since energy-intensive biotech and health care companies in Montgomery County pay higher energy taxes than their counterparts in any other jurisdiction in the Washington/Baltimore region.
If council members extend the “temporary” tax hike, they will seriously undermine their own credibility. Who would then believe them the next time they promise a tax hike will be “temporary?” But they will also further threaten the county’s commercial tax base by discouraging businesses from starting up, staying in or relocating to Montgomery County. Those are all good reasons to allow this “temporary” tax hike to expire on schedule.
