Metro board Chairwoman Cathy Hudgins wrote to the County Council asking the county to exempt Metro from the tax, saying its effect is to "have transit riders and taxpayers across our region funding the operations of Montgomery County government," according to the Oct. 13 letter.
Hudgins asked for the county to change the policy, possibly to exclude regionally funded groups such as Metro. But she threatened that Metro could seek a "judicial determination" if the county doesn't change its fee.
"This is a not a path I want to pursue," Hudgins wrote. "I strongly prefer a collaborative approach to problem solving that would not require the use of our court system."
It's at least the third letter Metro has sent to the county disputing the tax.
A total of $2.64 million out of a $4 million energy bill to Montgomery County went to paying the county tax during the last fiscal year, Metro spokesman Dan Stessel said. That means 66 percent of the transit agency's electricity costs to power trains and light stations in the county are going to the county tax pool.
But Montgomery County officials say that everyone must pay the taxes, even the county government and its schools.
"We have no intention of exempting them," county spokesman Patrick Lacefield said. "We have no intention of letting ourselves off the hook. We certainly aren't going to let Metro."
As a governmental agency, Metro does not generally pay state or local taxes. The Montgomery County fuel-energy tax applies to any company distributing "electricity, gas, steam, coal, fuel oil, or liquefied petroleum gas" in the county, not the actual user of the energy. Those companies then pass the tax along to their customers, so the county argues that it is not actually taxing Metro directly.
Federal agencies such as the National Institutes of Health and the Food and Drug Administration are also paying energy tax. In the past, some of them also asked about being exempted. "Generally the answer is 'No.' It's a broad-based tax and it doesn't discriminate," County Council staff lawyer Michael Faden said.
The tax is no small issue for Montgomery as it brought in $110 million countywide in the last fiscal year. It was not immediately clear how much of that comes from government entities like Metro and federal agencies, but Lacefield said it would be a significant amount.
The tax has been around for some 30 years, Faden said, meaning that Metro has paid the tax for "as long as they've had electricity generated in the county."
But the tax burden grew bigger in fiscal 2010 when the county upped the rates, raising them 150 percent for residents and 60 percent for businesses to help bridge a budget gap.
Staff reporter Rachel Baye contributed to this report.