Zack Hutchins
Director of Communications

For Release — February 5, 2009

Business Council opposes energy, cable and wireless telecommunications taxes

ALBANY— “Proposed tax increases on energy companies, cable providers and wireless telecommunications will damage New York's economy,” said Kenneth Adams, president & CEO of The Business Council of New York State, Inc in testimony to the legislature's joint fiscal committees' budget hearing.

“Our already high power costs will be driven higher by the proposed increase in so-called 18-A assessments on utilities,” said Adams. “The budget would increase these taxes by $651 million. Businesses and consumers will see this tax reflected in higher utility bills.”

“This tax increase will also impact telecommunications providers like Verizon and AT&T which are regulated utilities and will be hit by the increase. Not only will this drive up the costs for these services but it will put those companies at a competitive disadvantage with competitors who are not subject to the tax,” said Adams. “This tax increase would discourage new investment in broadband technology which many legislators are calling for.”

The budget proposal would also hit the same telecommunications companies with a $12.5 million increase in local gross receipts taxes.

Energy costs would also be driven higher by a proposed increase in the corporate franchise tax for electric generators.

“These taxes in total will handicap these industries, discourage needed new investment and increase costs for businesses and consumers who purchase the services,” said Adams. “This is absolutely the wrong direction to take the state budget at a time when we need to restore consumer confidence and grow our way out of this recession.”

“Cable subscribers would also be forced to pay more. The budget proposes an extension of the sales tax to cable and satellite television services, a proposal that could add an additional $550 million onto the residential and business customers' bills in state and local taxes, and have a chilling effect on additional cable industry's capital investments. This is an industry that has made over $3.3 billion in investments in New York State over the last 3 years,” said Adams.