State Senate Republicans and business leaders are speaking out against the extension of a utility surcharge in Gov. Andrew Cuomo’s proposed budget.
More than $2 billion has been raised from homeowners and businesses with a utility surcharge created four years ago during the height of the state’s budget crunch. That charge, which National Grid estimates costs an average household $55 a year — $540 for a small business — is set to expire at the end of March 2014.
Arguing that the state needs the $500 million a year generated by the surcharge, Cuomo is proposing a five-year extension. State Sen. James Seward, R-Milford, opposed the surcharge when it was imposed and wants to see it die on schedule.
“I believe we need to live up to that commitment,” he said Wednesday.
He noted that businesses have been expecting this charge to disappear and have been planning accordingly. To extend the surcharge at the last minute, Seward argued, would create instability for companies trying to grow in New York.
This would be particularly important for manufacturing in the state, with large manufacturers seeing an average cost of $30,000 a year from the surcharge.
Karen Burns, spokeswoman for the Manufacturers Association of Central New York, characterized the proposal as a huge step back for companies trying to thrive in New York. She noted that businesses have weathered this cost because of the promised sunset in 2014.
“To continue this tax will most certainly compromise the business community’s ability to do everything they need to on this continued path towards economic recovery,” Burns said in a statement.
AARP New York State Director Beth Finkel said ending this surcharge will ease the burden on families all over the state.
“This is a crucial kitchen table issue,” she said in a statement, noting the particular toll it takes on seniors living on fixed incomes.
Cuomo claims the loss of this revenue would hurt state economic development and human services programs.
On the economic development front, Seward argues more can be done by ending this surcharge. Regarding human services spending, he said these programs might be funded by increased business revenues from ending the surcharge and that the state would also have a year to find savings.
“Let’s make the state a more affordable place to live and do business,” Seward said.
He and fellow Senate Republicans, who rallied Tuesday, would like to see Cuomo pull the extension in his budget amendments.
Watch a video of Seward talking about the surcharge on the Capital Region Scene blog at www.dailygazette.com.