Leggett pushes for even bigger energy tax increase

Leggett’s proposed budget, released March 15, called for a $50 million increase in the county’s energy tax starting in July. But after meeting with bond rating agencies, which had concerns about the county’s finances, Leggett is looking to boost the tax immediately and at a higher rate to bring in a total of $95 million.

The new plan would raise the average county household’s bills by $5 a month, 72 percent more than his original proposal. The first plan would raise taxes by $2.90 a month.

Coupled with an 8.5 percent increase on water rates approved by the Washington Suburban Sanitary Commission, Montgomery County’s residents could see their utility bills climb an average $115 starting in July.

Leggett’s proposed energy tax increase has to be approved by the County Council, which is in recess this week. Council President Nancy Floreen, D-at large, said preserving the county’s coveted AAA bond rating, which allows the county to borrow money for construction projects at lower interest rates, is critical.

“We’ll do what we have to do,” Floreen said.

Fitch Ratings, a credit rating agency, had problems with Leggett’s plan to tap almost all of the county’s $119 million rainy day fund. The county’s reserves would be at 2.7 percent of the county’s spending, Fitch said, which could hurt the bond rating.

Fitch also said it “is concerned” the county isn’t conservative enough in its revenue projections.New unemployment numbers show the county’s jobless rate jumped to 6.2 percent in January, the highest since records were first kept in 1990.

Leggett said the county needs to tap into its rainy day fund because of lower-than-expected income tax revenues and the $60 million price tag of cleaning up the winter’s snowstorms.

He said the extra revenue raised by increasing the energy tax would be used to restore an extra $48 million to the fund.

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