Court correctly tosses NY’s illegal utility tax

Ratepayers can breathe a sigh of relief that a court just threw out a new law in the Empire State that would have placed a random tax on all utilities to pay for the sins of climate change.

A few years ago, the state legislature, in a desperate attempt to garner more revenue and to shut down the gas and oil industries, imposed a tax on utilities under the claim that utilities burned the gas and oil, and, therefore, should be responsible for global warming.

The law was known as the New York’s Climate Change Superfund Act. It received much pushback, with the Justice Department seeking to have it declared unconstitutional. The law intended to collect $75 billionfrom the biggest polluters, such as oil companies, over 25 years. Some lawmakers believe that oil companies should pay $3 billion each year for the next 25 years as a payback for having used fossil fuels as their mode of generating electricity.

What the elected officials did not say is that these taxes were going to be passed along to ratepayers. We warned when this tax was being contemplated that it was illegal and would be stricken. We were proven correct, but now the legislature has another hole in their budget because they will not be able to collect these taxes.

Ironically, at the same time, Governor Hochul was imposing these taxes against the utilities for burning oil and gas, she had to put the brakes on the awful 2019 climate control act which sought to convert us from gas and oil to 100% alternative sources within an obviously unrealistic time.

The guv eventually realized that we would’ve had massive blackouts and even further rate increases on top of the 60% increases that already have resulted from this 2019 act. Consequently, she decided in this election year to push off the mandate. Hochul’s policies have pushed electric rates in New York to a level 63% above the national average. The full consequences of policies initiated by Hochul and the New York progressives can be seen more fully in the white paper on prepared by the Center for Cost Effective Government.

Yes, we need to get more alternative sources of energy, but it is wishful thinking that we can shut the switch off on natural gas within the next couple of years. We need to transition to alternatives in a rational manner over a reasonable period of time without bankrupting the state.

Rates will continue to go up because of Hochul’s policies, but perhaps not as much as they would have if the court had not stricken this obviously illegal, punitive, political tax.

Steve Levy is Executive Director of the Center for Cost Effective Government, a fiscally conservative think tank. He served as Suffolk County Executive, as a NYS Assemblyman, and host of “On the Right Side Podcast.” Costeffectivegov@gmail.com