On April 7, 2014 the Legislature of Dutchess county voted and successfully repealed a energy tax that was adopted in December of last year and took effect on March 1.
In Dec. 2013, the Dutchess County Legislature adopted the 2014 country budget that included a new home energy tax for residents in the area. The Legislature voted 14-10 and the new tax took effect on March 1, 2014 and was set to expire in February 2017. This tax is meant to cover a $7.8 million budget gap—$6.4 million after the cities, towns, and villages received their share—and that if the tax was not implemented, the money would be cut from non-mandated services in the county like road-plowing and parks.
Assistant Majority Leader Angela Flesland claimed that if the home energy tax was not passed, residents would see a 10 percent increase in property tax bills; the home energy tax served as an option to address the budget gap without financially over-burdening residents of the county (Hudson Valley Reporter, “Dutchess Country Budget, Home Energy Tax Approved,” 12.6.13).
Republicans were responsible for passing the tax after hours of deliberation. Many democrats disagreed with the necessity of it, saying that there are many other options to cover the budget gap that would better serve the communities of Dutchess County. Democrat Joel Tyner explained, “We could use halfway houses instead of putting some people in jail. There could be housing alternatives for incarcerated people who are mentally ill. We would be able to actually return money to the taxpayers.”
The repeal of this tax is good news not only for residents, but Vassar students who choose to live off campus as well. Living off campus is already a cheaper alternative from on-campus dormitories, and the extra energy taxing could be a financial burden for those who are already struggling to pay for housing.
Nicole Schonitzer ’16, who might decide to live off campus at some time, responded to the repeal of the tax, saying, “It is definitely better that this energy tax has been repealed; it is one less thing to worry about having to pay for regarding housing. One of the perks of living off campus is that you can pay less than for living in the dorms but the energy tax would increase rent prices.”
The 3.75 percent energy tax is hitting the residents, especially with the exceptionally cold winter this year. Gas usage in Central Hudson was up 25 percent in January, which is 7 percent higher than last year’s usage. A senior citizen living in Poughkeepsie, Eric Fuegel, said, “I think it’s not good for us. I get a big bill about $500 to $600 every two months” (Hudson Solar, “Winter, Country tax, new feeds add up to higher electricity bills,” 3.2.14).
Utility bills are split into supply charges and delivery charges. Supply charges refer to the actual amount of electricity used and Central Hudson sells that to consumers without a markup for price. Delivery charges covers the distribution of electricity so that they can maintain the electric grid and the delivery infrastructure. The existence of the task made Dutchess County the “22nd locality in the state to tax coal, fuel oil and wood for heating, and the 40th locality or school district imposing a sales tax on residential gas, propane, electricity or steam” (Poughkeepsie Journal, “Lawmakers vote to repeal county energy sales tax,” 4.8.2014).
This tax has caused many citizens of Dutchess County to worry about their skyrocketing energy bills, but in the beginning of April 2014, they were pleased to find out that they may not have to pay it much longer. In the 2014-15 state budget deal for Dutchess County, there was new funding that may allow the new tax to be repealed. With the $5.25 million state mandate relief that came with the deal, the leaders that approved that tax started to work to repeal it because they had then deemed it unnecessary.
The relief budget is split so that $3.5 million is for county services and $1.4 million is for services at the Dutchess County Jail (Poughkeepsie Journal, “State aid to help repeal unpopular energy tax,” 4.1.14). In addition, the county will receive $350,000 to help with costs that have come into play since the Hudson River Psychiatric Center closed.
On Monday, the Dutchess County Legislature unanimously voted 24-0 to repeal the sales tax, with one Legislator member Gwen Johnson absent. After filing for a waiver from the state Department of Taxation and Finance for the 90-day notice, the tax would be gone by June 1, which is the first sales tax quarter date.
Officials will have to wait to see whether having the sales tax present for three months plus the state aid would add up to the $6.4 million the county expected to raise during this budget year to help balance the county budget as it stands now. County Executive Marcus Molinaro stated that he would not propose this tax next year.