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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

A.3008 C, Part N

Support

SUBJECT:

Extends 18-A

 

DATE:

March 11, 2013

 

The Business Council of the State of New York is opposed to A. 3008A Part N, which would extend the Temporary State Energy and Utility Service Conservation Assessment (often referred to as 18-a). In 2009, when this temporary fee was imposed, there was an explicit promise to the people of the state that this assessment would not be permanent.

The provision (Part N) would extend the 2 percent assessment, which was scheduled to be reduced to 1 percent this year. Extending the fee will cost all energy consumers (businesses, governments, schools, non-profits and residences) in the state $236 million in 2014 and $472 million each year for the next four years.

In 2009 then Governor Paterson advanced the Temporary State Energy and Utility Service Conservation Assessment as a means to encourage conservation, but in truth the funds were used to increase State spending. The increased assessment was a thinly disguised tax.

Before additional assessments are placed on energy, all must take into account that New York's energy rates are considerably above the national average in large part due to a high tax burden.

A 2010 report from the Public Policy Institute shows that state and local taxes and assessments on electric power alone impose a $6.4 billion burden on the state's economy. The study found that that “fully 26.68 percent of New Yorkers' electric bills support state and local taxes and fees. This equates to an average of $614.48 that each household (single family homes, apartments, coops and condos) in New York pays in these taxes through their power bill."

Average Percent of Income Spent on Utilities in Various Households 2009

*AFDC Aid to Families with Dependent Children
*SSI elderly Social Security Income elderly

Source : http://www.aep.com/about/IssuesAndPositions/Financial/docs/risingcostLow-Income.pdf

This tax is most concerning as lower-income families are more vulnerable to energy costs than higher-income families because energy represents a larger portion of their household budgets.

http://www.reuters.com/article/2011/02/10/idUS249737+10-Feb-2011+BW20110210

In the interest of electric and gas customers, The Business Council of the State of New York opposes the extension of 18-a.