Did You Know? (October 2016) newsletter distributed by the Office of Intergovernmental Relations, Montgomery County, MD
Montgomery County Maryland sent this bulletin at 10/28/2016 10:26 AM EDT
Local Authority for Imposing Hotel/Motel Taxes on Airbnb
Late in the 2016 Session, legislation was introduced on behalf of Airbnb that outlined a process for lodging host platforms like Airbnb to pay local hotel and motel taxes. The issues raised about the bill’s provisions proved too difficult to address given the time left in the Session. One key issue was that a number of subdivisions in the State have broad taxing authority. They already impose and collect the hotel and motel tax locally. So why should the collection of the tax for shared economy lodging be that different? In fact, the Montgomery County Council changed the local hotel tax in 2015 and 2016 to make all lodgings for hire taxable and to clarify that services like Airbnb are liable for the tax, including on the fees that are charged the lodger (so they are treated like every other hotel, motel or B&B). In 2016, Airbnb entered into an MOU with the County to pay hotel taxes on their clients' behalf, and they started paying the taxes in August 2016. Spoiler Alert: We anticipate that Statewide legislation will be reintroduced during the 2017 Session. We prefer that Montgomery County be excluded. We may not be alone.
County Council Considering Property Tax Credit for Elderly Individuals and Veterans
Under a new State law enacted in 2016, local governments are authorized to grant, by law, a property tax credit for a dwelling of: (1) an individual who is at least 65 years old and has lived in the same dwelling for at least the preceding 40 years; or (2) a retired member of the U.S. Armed Forces who is at least 65 years old. Council President Floreen recently introduced a bill to create this kind of credit. Under the bill, the credit would be available to an individual who owns a home with an assessed value of $500,000 or less and who is: (1) at least 65 years old and has lived in the same dwelling for at least 40 years; or (2) a retired veteran. The amount of the credit would be 20% of the property tax imposed on the dwelling and available for 5 years. The bill is tentatively scheduled for a public hearing on November 15.
WSSC Rate Structure Study Underway
WSSC is currently conducting a comprehensive study of its water and sewer rate structure with the goal of implementing a new rate structure by July 1, 2018. As a part of this effort, WSSC is coordinating with a Bi-County Rate Structure Working Group (Working Group) that includes representatives of the County Executive and County Council from both Montgomery County and Prince George’s County, and is in the process of establishing a Stakeholder Representatives Group (SRG) that will consist of 15-22 individuals representing a broad cross-section of our community to join the conversation and rate study process. The SRG will hold public meetings and provide feedback on rate structures under evaluation by the Working Group. WSSC also has engaged a third party facilitator, Black & Veatch Management Consulting, LLC, to work with the SRG and complete the comprehensive rate study. Click here to see a copy of the letter that was distributed by WSSC’s General Manager to potential members of the SRG. Click here for supplemental information regarding the comprehensive study.
Advocacy Efforts of Boards, Committees and Commissions
More than 75 Boards, Committees and Commissions (BCCs) advise the County Executive and County Council on a wide variety of issues that affect the quality of life in Montgomery County. BCCs are made up of individuals appointed by the County Executive and confirmed by the Council, and generally meet one or two evenings per month, have three year terms and are advisory in nature. In addition to advisory duties, some BCCs have traditionally had authority under County law to advocate at the State and/or federal levels on issues within the scope of their advisory duties, and others have not had this authority. This past spring, the County Council passed legislation that gives 18 BCCs who previously lacked advocacy authority the ability to engage in advocacy activities at the State and federal levels if approved by the Office of Intergovernmental Relations (OIR). Click here to see a copy of the Advocacy Request Form that OIR has developed to facilitate the approval process.
Recommendations for Major Re-Distributions in State aid and New Local Funding Mandates
After 2 ½ years of work, the consultant working with the Adequacy Study Stakeholders Workgroup recently issued a Draft Final Report regarding the adequacy of education funding in Maryland. It includes recommendations for extensive changes to the State’s current school financing system. Many of these changes relate to the calculation of local wealth and local share of education funding that would negatively impact high wealth counties. If all of the consultant’s recommendations were adopted, total Statewide education funding (including both State and local shares) would increase by $2.6 billion. Montgomery County would lose $354 million in State aid and be required to increase its local share by $780 million. Under this scenario, total funding for MCPS would increase by $425 million, but this increase would be attributed solely to increased County funding.
The Final Report is expected to be released by the end of October and presented to the Commission on Innovation and Excellence in Education (Kirwan Commission) on December 8. The Kirwan Commission has announced that it plans to evaluate the consultant’s recommendations next spring/summer and make its own recommendations for changes to the State’s school financing system by December of 2017. OIR will be working closely with the County’s representatives on the Kirwan Commission (Senator Rich Madaleno, Delegate Anne Kaiser and Councilmember Craig Rice) and our State Delegation to ensure that, at the end of this extensive process, the needs of the County’s very large school system with swiftly changing demographics are recognized and Montgmoery County is treated fairly.