County Executive: Timing Not Right to End Rockland’s Energy Tax

Sparaco joins Democrats to propose energy tax repeal that Day says is coming too soon

BY BILL DEMAREST

NEW CITY – Rockland County Executive Ed Day says he too would like to get rid of the 4 percent tax imposed on Orange and Rockland Utilities customers’ bills in 2012, but he contends the county’s efforts to resolve its fiscal crisis still require the funding from the tax.

Leaders of the Rockland County Legislature have proposed coming up with a plan to repeal the tax, possibly in 2015.

“While I supported the energy tax as a two-year approach to deal with the county’s fiscal crisis while serving as a legislator in 2012, these sponsors specifically tied the measure to the deficit bond,” Day said. “While we have successfully changed the fiscal trajectory of the county, any effort to repeal the 4 percent energy tax at this time is both premature and reckless. This action could lead to ratings agency downgrades, erasing all positive steps taken since my administration took office on January 1.”

Day, R-New City, says the county must make sure it has cash coming in that would take the place of money raised by the energy tax.

“Moving ahead, we look forward to working with the sponsors to help identify a revenue stream to the tune of $13 million each year to fund the deficit bond payment,” Day said.

Legislature Chairman Alden H. Wolfe, D-Ramapo, Deputy Minority Leader Frank Sparaco, R-Valley Cottage, and Legislators Ilan Schoenberger, D-Ramapo, and Aron Wieder, D-Ramapo, have sponsored a resolution to repeal the 4 percent tax on the cost of electricity and natural gas used by Orange and Rockland Utilities customers in the county.

Wolfe said the plan calls for either an outright repeal or a phase-out of the tax in 2015. The county takes in about $8.8 million with the tax, but was originally hoping it would generate about $12 million annually.

The legislators contend that steps such as the planned sale of Summit Park Nursing Home and Hospital, the planned transfer of mental health and pre-natal services to Nyack Hospital, the elimination of the Department of Tourism, as well as the recent $96 million deficit bond are putting the county in the position where it can get rid of the energy tax.

The proposal is set to be reviewed by the Legislature’s Budget and Finance Committee in about two weeks.

In addition to budget deficit actions taken by the county, Wolfe believes that conservative budgeting by the county for 2014 has helped set the stage for a repeal of the energy tax.

The tax hits Rockland residents differently, depending on their energy supply selections. About 55,000 O&R customers pay about $120 annually for the tax, with about 45,000 other customers paying about $48 annually.

Among the measures taken by Rockland County to resolve its financial crisis, the county recently had a $96 million deficit financial bond sale, in which Rockland County received a low 2.70 percent interest rate.

The bond offering was aggressively bid and re-priced to generate a total of $107.46 million for the county. This difference represents a premium on the county’s investment generated by the buyers of $11.46 million. Rockland County Executive Ed Day said this amount will further enable the county to reduce it deficit fund balance.

The Rockland County Legislature approved the sale of the bonds in January to finance the county’s fiscal deficit.

Republished with permission