Energy tax likely to remain

Friday, May 22, 2009

The energy tax is 1.25 percent of bills for electricity, fuel oil, liquefied petroleum and natural gas. It is budgeted to bring in $1.5 million to the county budget.

With revenue holes being plugged in both the current budget and the 2010 budget, Raley said he can't find where he would make cuts to eliminate or reduce the tax rate.

"It's not looking good for that," Raley said Thursday. "The reason is because of the impact of the state and we have every indication that the negative fiscal impact next year is going to be just as bad if not worse," he said.

St. Mary's County had $3 million withheld from its share of the gas tax to help balance the state budget, and county surpluses, called fund balances, are being used to offset that.

If the local energy tax was reduced by half, that would still need $750,000 in budget cuts. "That $750,000, I haven't been able to identify. At this late hour, I don't know," he said.

"Unfortunately all the concern was on constant yield," he said. Using that property tax formula, which would have reduced the property tax rate, would have required $5.9 million in budget cuts.

Raley, in his third consecutive term, said this budget cycle and the one in 2000 were the most unpleasant. Tax rates were hiked in 2000. "This one ranks up there as being the one I'm least satisfied with," he said.

As for the energy tax remaining, he said, "I'll take the blame, but I can't find it," in the reductions that would have to be made to eliminate it.

Commission President Francis Jack Russell (D) said Wednesday, "He sure has tried to look for some tax relief for the average people." However, "You cannot cut a recurring revenue stream right now, looking at what we have to face."

jbabcock@somdnews.com