Kathleen Miller, The Examiner
2008-04-16 07:00:00.0
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WASHINGTON -

The Montgomery County Council is considering bumping up taxes on electricity by 10 percent, which lawmakers say would help the county balance its budget while reducing fossil fuel consumption.

Councilwoman Nancy Floreen proposed the tax increase Tuesday, projecting that it would add only $10 a year to homeowners’ energy bills but net $11 million for the county.

Floreen said her “carbon surtax” is based proportionally on the greenhouse gas emissions of particular fuels and would increase rates for electricity and heating oil by 10 percent and natural gas and propane taxes by 5 percent.

“I am proposing this carbon surtax to ensure that we focus our fuel energy taxing efforts on those uses that are proportionally more destructive to the environment,” Floreen said. “It’s not enough to do any harm to residents’ pocketbooks, but it would help keep us on track to preserve our existing environmental initiatives.”

Floreen said she did not plan to specifically designate programs to benefit from the $11 million in new money expected from the carbon surtax because of difficult fiscal times for the county.

Montgomery is facing a $297 million budget shortfall, and County Council members are weighing the merits of County Executive Ike Leggett’s budget recommendations that include an 8.3 percent increase in the property tax rate. County residents are already reeling from the state’s special legislative session last fall that increased the state sales tax, and the income tax rate for people making more than $150,000 a year and last week’s passage of a new Maryland millionaire’s tax that will largely be carried by residents of Montgomery, home to about 40 percent of Maryland’s millionaires.

Council President Mike Knapp introduced a separate energy tax bill Tuesday that he said was intended to be only a “placeholder,” as the council wrestles with whether to raise property taxes beyond the rate of inflation.

Knapp’s proposal would increase residential and agricultural energy tax rates by 9.13 percent. He said he suggested the measure because he wanted flexibility in case the council ultimately decides not to increase property taxes to the extent proposed by Leggett and needs additional revenue to make up the difference.

“I don’t know if we’ll use it or not,” Knapp said. “Clearly we need a lot of alternatives out there.”

  kmiller@dcexaminer.com