Home > ADVOCACY > GRT Letter Utilities

March 17, 2010


Hon. William T. Stachowski (also sent to Governor Paterson & all members of the WNY state delegation)
New York State Senate
918 Legislative Office Bldg.
Albany, NY 12247

Dear Senator Stachowski:

On behalf of the 2,500 employer members of the Buffalo Niagara Partnership, I write in strong opposition to the inclusion of an expanded gross receipts tax (GRT) on essential utility services in the 2010-11 Executive Budget. We need your leadership to protect the state’s already overburdened taxpayers by working to eliminate this tax increase from the Governor’s budget proposal.  

New York already holds the dubious distinction of imposing state and local taxes on utility services – $6.4 billion every year – that far exceed the national average. The proposed tax would further increase the local GRT by 2% – adding another $100 million to the energy tax burden in New York State. State and local governments in New York already raised taxes on utility services by 15% in 2009. This new tax hike on service providers and their customers places another financial burden on New Yorkers at a time when they can least afford it. 

The negative effect of increasing the local GRT will be twofold. Beyond hurting struggling New Yorkers, it hinders utility companies’ ability to invest in infrastructure and jobs throughout the state.

Overall, raising taxes to support Albany’s spending “habit” is a failed concept – as evidenced by the state’s growing budget deficit. Unchecked, the state’s deficit will continue to grow to over $30 billion within five years. Nickel-and-dime taxes such as the proposed utilities services tax will not mitigate that hole in the budget. Reducing government spending is the only way to right the state’s fiscal ship. 

Strong fiscal and economic recovery is needed in New York but taxing an industry that drives innovation, investment and economic growth is not the answer. New or increased taxes – including the proposed GRT tax as a revenue item in Governor Paterson’s Executive Budget – are unacceptable. Given the financial burden this tax increase would place on New Yorkers, the Partnership strongly encourages you to eliminate the expanded local GRT tax in the 2010-11 Budget. 

Sincerely,
 

Andrew J. Rudnick