Gov. Andrew Cuomo showed that it was possible to get New York’s chronically inert Legislature to approve several of his top priorities this year. He made history, getting the new law allowing same-sex marriage passed. He started the clean-up of Albany’s tainted government with an ethics bill that requires more transparency. And he prevailed in getting a more rational tuition plan to help the state’s public universities.
The budget package he pushed through, however, will devastate many cash-strapped communities and hurt low-income families.
Needier New Yorkers will soon start to feel the deep cuts made to health care and education in Mr. Cuomo’s budget. He refused to extend a tax surcharge on the highest earners, which would raise about $4 billion in revenue a year and reduce the need for some cuts. He campaigned especially hard for a 2 percent annual cap on property taxes that will hobble poor districts in the state.
There is still plenty left for Mr. Cuomo and the legislators to do. Instead of waiting for the January session, they should return by mid-September to finish their work.
¶New York needs an independent commission to draw new political districts in time for next year’s elections. The state’s redistricting process after every census is notoriously slow and unfair. Mr. Cuomo’s bill, introduced in February, would create a bipartisan group to draw districts based more on criteria like having near-equal populations and lines that are contiguous with county boundaries. A laughable proposal by State Senate Republicans puts off the whole problem until 2022.
Preposterous attempt to present this regressive tax as environmentally friendly “energy conservation policy” only added insult to injury. The utilities were not required to add a line item to customer’s monthly bills showing the size of the surcharge. If the goal was conservation, it seems unlikely that anybody would be encouraged to conserve by effectively hiding the cost of the tax.
Needless to say, those hidden costs turned out to be huge. In 2009, New York utilities paid an estimated $6.367 billion in state and local taxes, assessments and fees, marking an increase of $853 million than the total the industry paid in 2008, according to the Albany, NY-based research organization The Public Policy Institute of New York State.
In New York, more than one-quarter of the average customer’s monthly electric bill pays for state and local taxes, according to the Public Policy Institute.
While it is would be political suicide to support, deregulating America’s the retail electricity business would probably result in the biggest tax break in U.S. history.
Over the past 50 years, state and local politicians have treated utilities the ways pigs treat a trough. State and local law makers have turned the energy industry into tax collectors and in the process increased the burden imposed on rate-payers. Customer bills are commonly loaded with hidden taxes and disguised fees ranging from the state’s gross receipts tax, sales taxes, local property taxes and local gross receipts taxes.
If Cuomo repeals the six-fold tax increase imposed in 2009, he will take a significant step towards restoring sanity in New York State’s electric power industry. There will be many more remaining.
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