Montgomery County Council poised to pass progressive income tax plan

In a 6-5 straw vote Friday, Montgomery County Council members indicated they are likely to pass a progressive income tax plan that would raise rates by 0.1% for residents with an annual income greater than $150,000.

Under the plan, this group would pay a 3.3% income tax.

The current income tax rate for all residents is 3.2%.

The plan would also lower income taxes for residents making $150,000 or less annually. Those making $50,000 or less annually would pay 2.7%, and those making $50,001 to $150,000 would pay 3%.

County Executive Marc Elrich in March recommended an $8 billion operating budget that calls for a roughly 6% property tax hike and a 0.1% income tax increase. Most council members voiced concerns that his plan would overly burden residents impacted by jobs cuts and rising prices.

Friday’s proposal, which the council’s Government Operations Committee put forward, would eliminate the county’s income tax offset credit, which is currently set at $692. Homeowners who claim their home as their principal residence are eligible for the credit. This would create a new source of revenue for the budget.

“Moving to a progressive income tax actually means we have a loss of revenue,” council member Kate Stewart, who chairs the Government Operations Committee, said during a work session Friday. “In order to be able to move us in that direction and be able to work on this budget, the committee looked for how we could offset that loss of revenue.”

Stewart said 35% to 40% of county residents are renters and ineligible for the current tax credit.

Friday’s vote is nonbinding. Council members will take a final vote next week.

All three members who are running for county executive — Evan Glass, Andrew Friedson and Will Jawando — voted against the progressive income tax increase Friday. Kristen Mink and Laurie-Anne Sayles also voted against the proposal.

Council President Natali Fani-González, Vice President Marilyn Balcombe and members Shebra Evans, Sidney Katz, Dawn Luedtke and Stewart voted in favor.