Removal of Taxpayer Utility Surcharge Urged

In 2009, former Governor Paterson enacted a tax surcharge on electric, gas, steam and non-municipal water services that has cost taxpayers almost $2.5 billion over the four years it has been enforced. The 18-a assessment (a reference to the state law under which it was enacted), which has increased utility bills for nearly every taxpayer in the state, is scheduled to expire on March 31, 2014.

Senator Simcha Felder (D-Brooklyn)  signed on to the Senate GOP’s letter that urges removal of the proposed extension of the utility tax surcharge from the Executive Budget.

If passed, the five-year extension would cost consumers and businesses nearly $3 billion.

“This tax surcharge takes money out of the pockets of hard-working New Yorkers, hurts businesses, and hinders job growth,” Senator Felder said. “This is simply a new tax.” New Yorkers already pay some of the highest utility rates in the country, Felder pointed out.

“Allowing this tax surcharge to expire will make New York more economically competitive, reduce costs on businesses, help expand our economy, and create new private sector jobs,” Senate Republican Conference Leader Dean Skelos said. “This is a key element of our job creation agenda for this year.”

Based on average consumption 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 for a small business would be about $540 per year, while average household utility bills would increase by $55 per year.

“Instead of paying higher utility taxes, families and businesses across our state should be able to keep and invest more of what they earn,” Senator Felder added. “In this difficult economy, every penny counts.”