Sen. Kemp Hannon - Sixth District, New York

Hannon Says End Tax Surcharge on Utility Bills; Give Homeowners a Break
Posted on February 12, 2013

HANNON SAYS END TAX SURCHARGE ON UTILITY BILLS; GIVE HOMEOWNERS A BREAK

“In 2009, Senate Democrats and Governor Paterson enacted a tax surcharge on utility bills that has cost ratepayers almost $2.5 billion over the last four years,” said Senator Kemp Hannon (R-Nassau). “I voted against this tax surcharge because it hurt businesses, hindered job growth and took money away from families, schools, seniors – all New Yorkers that pay energy bills.”

Hannon has joined his fellow Senate Republicans to urge Governor Cuomo to remove the proposed extension of this utility tax surcharge from his Executive Budget. The “18-a” surcharge, which has increased utility bills for every taxpayer in the state, is scheduled to expire on March 31, 2014. The Governor’s proposed five-year extension would cost businesses and consumers a total of almost $3 billion.

The proposed extension would cost energy ratepayers $509 million for the this year and the following four years, plus an additional $255 million in state fiscal year (SFY) 2018-19. The total impact of the extension would be $2.8 billion, with most of the burden falling on small and large businesses, especially manufacturers who use large amounts of energy.

“The Governor should use the 21-day amendment process to remove the proposed extension from his budget plan,” said Hannon.

According to figures from National Grid, the impact of the energy tax extension on a typical large business is estimated at $30,000 per year. The added cost on a typical small business would be about $540 per year and average household bills would increase by $55 per year.

“In the past two years, we’ve made great strides in turning our economy around and helping businesses create new jobs,” said Hannon. “We have reduced taxes and made important investments in job creation projects across the state. New Yorkers already pay some of the highest utility rates in the country and they clearly deserve a break. Allowing this surcharge to expire will also help to create jobs and make New York more economically competitive.”

Section 18-a of the Public Service Law authorizes an assessment on utility bills to fund the operations of energy-related agencies and authorities. In 2009, Governor Paterson and Senate Democrats imposed this surcharge on electric, gas, steam and non-municipal water services. The surcharge was intended to be a temporary measure set to expire on March 31, 2014. The Governor’s proposal seeks to extend this tax an additional five years.