Quarterly: Summer 2004 - GWCAR - Greater Washington Commercial Association of REALTORS

CBQ >> Summer 2004 Issue

Montgomery County Gives Property Tax Relief, Hikes Energy Tax

On May 27, the Montgomery County Council approved the FY05 Capital and Operating Budgets and the FY05-10 Capital Improvements Program.

According to the council's May 20 press release, the budget's fiscal year, which began July 1, includes support for county funding of critical programs and nearly $11 million in property tax relief.

"The council also unveiled a six-year, $2.2 billion Capital Improvements Program-an overall 26 percent increase. The schools increase is $271 million--or 43 percent--and gives priority to new school construction and modernization to relieve school overcrowding. The $521 million for transportation projects to address traffic congestion and mobility is a $67 million, or 14.7 percent, increase in county spending on transportation. The $3.3 billion operating budget includes a $1.6 billion operating budget for the public schools--a 7.3 percent increase over last year and a $21.2 million increase over the County Executive's proposed budget."

Fortunately, the real estate community escaped any increases to the recordation and impact taxes this year. In fact, the council approved a reduction to the property tax rate by one cent per $100 assessed valuation, which amounts to a $10.8 million cut in property taxes for homeowners.

However, to offset the property tax cut, the council increased the energy tax by $39.6 million (52.1 percent), which will cost homeowners about $37 annually. And about 70 percent of the energy tax is paid by businesses and by federal facilities otherwise exempt from county taxes.