Budget & Finance Committee shoots down energy tax repeal

BY MICHAEL RICONDA

NEW CITY – In an occasionally heated session, the County Legislature’s Budget & Finance Committee declined to approve a repeal of the county’s four percent residential energy tax on June 10.

Though bipartisan support initially appeared to push the bill into the realm of possibility, the Budget & Finance Committee was split among its attendant members. Legislators Frank Sparaco, Tony Earle, John Murphy and Alden Wolfe voted for the repeal. Legislators Harriet Cornell, Nancy Low-Hogan, Michael Grant and Jay Hood voted against.

Due to the absence of co-sponsor Legislator Ilan Schoenberger, Wolfe attempted to table the resolution until another session, but a vote to do so failed and forced the matter to a final vote. Legislator Aron Wieder, a co-sponsor of the resolution, was also absent.

Given the perception that the county was improving its fiscal stability and pressure from constituents who struggled with both property and energy taxes, talk of ending the obligation had been floated since March. However, its chances were uncertain given a lack of support from County Executive Ed Day.

County Finance Commissioner Stephen DeGroat, who spoke before the legislature on the matter, was wary of a repealing the tax without finding an equivalent $8..8 million revenue stream. He warned that since the tax was linked to the passage of deficit financing bonds and seen as a way for the county to right its fiscal state, rating agencies might disapprove.

“We could have very negative implications dropping that tax from rating agencies unless we provide a revenue making up the difference,” DeGroat said.

While the tax is not segregated specifically for debt service, it is considered a part of the county’s larger general obligation pledge. Hence, it is considered to be directly connected to debt service.

At least some legislators seemed to agree. In a continued reflection of a growing divide between the County Legislature and the County Executive, legislators lamented the lack of an alternative and, by extension, the lack of a long-term debt relief plan from County Executive Ed Day.

Legislator Jay Hood echoed the sentiments of the legislature. Hood was cautious regarding any potential repeal which could ultimately destabilize county revenues. “If we get rid of this and we have all these other problems going on that have not been dealt with, we’re looking at a property tax increase of ten percent,” Hood said.

Legislator Michael Grant seemed to agree, expressing concern that bond agencies might “recoil” at the elimination of the tax even as the county makes strides in financing its deficit.

The energy tax impacts about 100,000 customers. However, about 45,000 of those taxpayers-the ones who use providers other than Orange & Rockland-only pay about $48 per year. The remaining taxpayers must cough up about $120 per year for both gas and electric services.

Though the resolution failed this week, Wolfe promised it would be back in a slightly modified form at some point in the future.