Proposed Increase in Local Utility Taxes (GRT)
S.6606-A/A.9706-A (Part HH)
MEMORANDUM IN OPPOSITION
Unshackle Upstate, a bipartisan coalition of more than 70 business and trade organizations representing a growing group of more than 70,000 employers and employing upwards of 1.5 million people, opposes the increase in local gross receipts taxes on utilities that has been proposed as part of the Governor's 2010-11 Executive Budget.
At a time consumers can least afford it, the Executive Budget proposes expanding taxes on essential utility and telephone services, including electric, gas, water and telephone. If enacted, this proposal will authorize localities across the state to increase the local utility tax by 200 percent.
This provision in the Executive Budget will further increase consumer and business energy and telecommunications costs in New York, which are already far above national averages. This tax increase will hit consumers every month, further harming the State's economy by increasing the cost of doing business in New York and driving businesses to states with lower tax rates.
New York should be looking for ways to grow jobs, not taxes, especially in the wake of the energy tax increase adopted as part of the 2009-10 budget.
New York State is in the midst of an unprecedented economic crisis. The State faces major budget deficits, thousands of New Yorkers have lost their jobs, and many more are facing the potential loss of their jobs. Allowing local utility taxes to be increased will drive up energy and telecommunications costs in New York, further increasing the cost of doing business in New York.
A recent report from the Business Council of New York State's 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."
We urge the Legislature to work to reduce this burden on taxpayers, not increase it.
It is essential that New York position itself as a location for new job growth and investment. A better business climate, promoted by lower taxes, is the best economic development policy.
In contrast, this proposal will further damage the state's economic climate, inhibit economic growth, and further burden the struggling families and businesses of New York State.
For these reasons, Unshackle Upstate strongly encourages the Legislature to reject the proposed local GRT tax increase as it moves to enact the 2010-11 State Budget.