The Gazette reports that two council committees agreed to an energy tax increase for both residential and business customers in Montgomery County. Expected to go into effect this Thursday, May 20th, the increase is seen as an effort to assist in the reconciliation of the County’s $1 billion budget shortfall.  Erin Cunningham of the Gazette writes,

“County Executive Isiah Leggett (D) has proposed the increase to raise $21.4 million for fiscal 2010, which ends June 30, and $133 million for the next fiscal year.

Council members did not discuss what the increase should be, but based on one possible formula, businesses that purchase 1 million kilowatt hours a month, would see their monthly electricity bills increase from $13,843 to $23,852.

Residential customers using about 1,000 kilowatt hours per month — what Pepco describes as an average user — would see their energy taxes increase from $5 to $15, according to council data.

Council members also supported calculating the energy tax rates at a higher level that would raise $21.4 million in fiscal 2010 if applied from May 20 to July 1, then reducing the rates on July 1 to cover the necessary revenue.”

Still facing a large amount of resistance from the business community, Lisa M. Fadden, vice president of public affairs for Montgomery County Chamber of Commerce states, 

“At this point we have to raise this revenue. We have no choice.”

The proposed tax increase has a sunset in 2012. The Montgomery County Council is expected to vote on and determine the new tax rate on Wednesday.