Monthly Column: It’s time to turn off the lights on energy tax surcharge


By: Michael H. Ranzenhofer, State Senator - 61st District

In 2009, the State Budget imposed an energy tax surcharge, known as the two percent utility tax, that has cost each and every ratepayer in New York State $2.5 billion over the last four years.  I voted against this tax surcharge because it hurt businesses, hindered job growth, and took more money away from families and seniors.

Section 18-a of the Public Service law authorizes assessments on utility bills – electric, gas, steam and non-municipal water – to fund the operations of energy-related agencies.  However, the funds from the surcharge were deposited directly into the State’s general fund as a way to close budget deficits – just another fiscal gimmick out of Albany’s playbook.  It was my opinion, as it still is today, that reductions in spending erase deficits, not new or higher taxes.

Under the 2009 law, the energy tax surcharge is scheduled to expire on March 31st of next year, except Governor Cuomo has proposed an extension of the tax for five additional years in his Executive Budget.  An extension of the tax would cost businesses and consumers a total of almost $3 billion. 

According to figures from National Grid, the impact of extending the energy tax is estimated to be $30,000 per year for a typical large business; $540 per year for a typical small business; and $55 per year for an average household utility bill. 

In response to this proposal, my State Senate colleagues and I have been working with statewide business organizations to urge the Governor to remove the tax extension from his Executive Budget.  The Business Council of New York State, National Federation of Independent Businesses, New York Farm Bureau, Unshackle Upstate, and Manufacturers Association of Central New York support ending the utility tax surcharge as scheduled.

The elimination of this energy tax is a critical component of my job-creation agenda for 2013.  Simply put, the energy tax surcharge is a job-killing tax.  Higher energy costs place a tremendous drag on our economy.  Instead of paying more energy taxes, I think small businesses and families across our State should be able to keep and invest more of what they earn. 

In the past two years, we’ve reduced taxes and made important investments in economic development projects, helping the private sector to grow and create jobs.  I believe that extending this surcharge would be a step in the wrong direction for New York’s economy.  If the energy tax surcharge is allowed to be extended, businesses and consumers will end up paying almost $5.5 billion more in energy taxes over nine years. 

It’s time to turn off the lights on the energy tax surcharge.  You can be assured that, in the coming weeks and days, I will be working with my colleagues to get this tax extension removed from the budget.  

Senator Ranzenhofer's monthly column appeared in the Amherst and Clarence Bee on February 20th.