FY16 Energy Tax Fast Facts - Montgomery County Advocacy

Posted Date: 
April 29, 2015

Fast Facts

 

  • The proposed revenue from the FY16 Fuel/Energy Tax is $206.2 million, the third highest source of tax revenue. 
    To see the explanation of the proposed FY16 Fuel/Energy Tax, click here for the Revenue section of the FY 16 Operating Budget and scroll down to “Tax Revenues” where you will find “Energy Tax.”
     
  • The Energy tax adds $8,000-$15,000 a month that office building tenants must pay.

    - The Montgomery County Energy Tax is significantly higher than that in any of our neighboring jurisdictions which undermines the County’s efforts to retain our existing employers and attract new business to locate in Montgomery County.

    - The Energy Tax adds another challenge to retaining federal agencies in leased space in Montgomery County.

  • Costs are most significant for hospitals, bio-tech companies, and office space.

    - The Energy Tax harms the very industries Montgomery County is trying to attract, namely life sciences (biotech, pharmaceuticals, vaccines, therapeutics, medical devices), cyber security and information technology which, despite rigorous conservation efforts, are all heavily dependent on energy.

  • Montgomery County businesses pay the majority of the County’s staggering energy tax.

    - The Energy Tax disproportionately impacts non-residential consumers at a rate of more than 2 to 1. The larger share of receipts is received from the non-residential sector at 68% and residential users at 32%.

    - A business that owns its building is paying it directly to the utility companies.  Virtually all commercial leases make the tenant —restaurants, retail, medical offices, to name a few - responsible for payment of increased taxes and energy costs.

  • The Energy Tax harms Montgomery County businesses.

    - The Energy Tax creates a larger overhead for Montgomery County businesses making them less able to win contracts in the competitive government contracting procurement space.

    - The additional Energy Tax translates into fewer reinvestments into the improvements, employees and services (in the case of non-profits especially) necessary to grow a business and contribute to the local economy. 

  • The FY 16 Resolution to amend Fuel/Energy tax rates and reduce the revenues received by 10% is a step to mitigate the tax.
     
  • The 100% increase in the 2010 Energy Tax should be sunset as originally proposed in the FY 11 approved budget.    

    - The Energy Tax was intended to be a stop-gap measure in the FY11 budget. Five years later, the ongoing reliance on an inflated energy tax adds to the cost of doing business in Montgomery County and is undermining the County’s economic development strategy. 

MCCC Strategic Partners