More than 35 municipalities across the state, including three local villages, that maintain their own power sources have received word that they will have to collect more money from their residents to help fund the state budget.
The New York State Public Service Commission notified the municipalities that the 2009-10 State budget, enacted on April 7, contained language that requires the Department of Public Service to collect a Temporary State Energy and Utility Service Conservation Assessment (Public Service Law S18-a(6)), which ultimately translates to a 2 percent tariff increase for taxpayers who reside within municipalities who maintain their own power sources. While there is not yet any word on just how much this will affect the power bills of local taxpayers, the state is anticipating that the Temporary State Assessment will generate an estimated $540 million worth of additional revenue during the 2009-10 State Fiscal Budget. This assessment, effective retroactively from April 1, 2009, extends until March 31, 2014, and is applicable to electric, gas, steam, and water corporations, municipal electric and gas corporations subject to Commission jurisdiction and the Long Island Power Authority.
The municipalities in this area affected by this sudden change are the villages of Ilion, Mohawk and Frankfort.
According to J.K. Hage, of Hage and Hage Associates of Utica, the Public Service Commission’s decree is a binding order, which requires municipalities to increase these tax levys, couched under the term “temporary surcharge.”
“Essentially, [Governor] Paterson’s budget included this ‘hidden tax’,” said Hage, “And the news came to the municipalities out of the blue. At this point, there is little that can be done to address this increase.” The assessment was decided upon during a legislative session on June 18, and municipalities are required to begin collecting the 2 percent increase as of July 1, 2009.
“This is a blow to taxpayers who are already over-extended due to the poor economic conditions,” said Ilion Mayor Mark Cushman, “Now is not the time for the state to be reaching into the pockets of hard-working citizens and taking even more from them.” Municipal leaders, like Cushman and the Board of Trustees in Ilion worked long and hard to bring their taxpayers a budget for the 2009-10 fiscal year that contained a zero percent increase, and after many hours of discussion and belt tightening, they managed to do just that.
“That the state would do this is a kick in the teeth, both to municipal leaders and to the taxpayers that they represent,” Cushman said.
J.K. Hage cited Ross Perot’s now famous statement when he was running for President when he spoke of the “giant sucking sound of businesses leaving the United States.”
Hage remarked that it is much the same here in the State of New York. “Except now, the giant sucking sound is the sound of New Yorkers leaving New York,” Hage said. “The outrageous rise in property taxes, income taxes, renewal fees are already breaking the average New Yorker’s back, and in the past years more than 2.1 million New Yorkers have voted with their feet...leaving behind a state that continues to take what seems to be more than their share of hard earned tax payer money.”
This unanticipated tariff, released to municipalities less than two weeks before its required implementation, is the first in what many fear to be a host of potential bad news from the state’s 2009-10 budget.
“This clearly demonstrates that the budget process this year was badly handled from the start,” Assemblyman Marc Butler said in a phone interview on Thursday afternoon. Butler, who voted against Governor Paterson’s budget in April, added, “I think we may be in for a number of unpleasant surprises in the coming months. We have got to inject some sense into the State budget management. The State cannot continue to push more and more fiscal responsibility down to the local level. There are difficult decisions to make at the state level, and obviously, they were not made this year.”
The revenue gained from this 2 percent tariff will go into the state’s general fund. “New Yorkers are reaching the breaking point financially,” said Butler, “And continuing to take from them is simply no way to run a government.”
Ilion, N.Y. —
