Let surcharge disappear

The Fulton Montgomery County Regional Chamber of Commerce is watching out for business, industry and commerce – because without a healthy economy, few prosper.

The chamber’s recent objection to the continuation of the state’s 2 percent surcharge on electric bills makes good economic sense.

The surcharge, which was raised from one-third of a percent to 2 percent in 2009 by then-Gov. David Paterson, was supposed to return to one-third of a percent this year. The state tax is used to fund energy-related agencies and authorities. However, it would continue at 2 percent for the next five years in Gov. Andrew Cuomo’s proposed budget.

The chamber estimates the surcharge would extract $236 million from the state’s economy this year and $474 million a year over the next four years, totaling more than $2.1 billion. It argues the state’s residential energy costs already are 51 percent higher than the national average while commercial costs are 65 percent higher.

A simple way to look at this is a dollar taken from a local economy is a dollar not spent locally. Taxes and fees make life particularly hard for people in our area, where unemployment rates hover around 10 percent and local schools and governments are struggling financially.

Chamber President Mark Kilmer said some larger local businesses can pay as much as $20,000 a month for electricity, so the 2 percent surcharge could cost “a job or more per company.” He said he believes cutting waste in government would be better than raising taxes.

The governor has gone on television touting the state’s business climate because he says taxes have not been raised. While the surcharge is technically not a new tax or an increase of a current tax, not allowing a tax to decrease still feels like a penalty for everyone who pays it.

When government gets used to a revenue stream, it has a hard time giving it up. And it spends some of its revenue developing laws, regulations and mandates and new paperwork, which drive up local expenses – a kind of vicious cycle.

The chamber’s recommendation is a move in the right direction if we want to see more business development.

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