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Tax Breaks for Energy Conservation, Price Relief, Heat Aid for Poor
Tuesday, January 9, 2001
Senate Majority Leader Joseph L. Bruno, Energy Committee Chairman James W. Wright and members of the Senate Majority today unveiled a plan to slash energy taxes by nearly a half-billion dollars, lowering energy costs and helping homeowners and businesses slash their heat bills by encouraging energy-saving improvements.
The Senate Majority plan is designed to provide relief to consumers from rising fuel bills and provide energy conservation incentives, including a first-ever exemption from state and local sales taxes on energy-saving products like new furnaces, boilers, insulation and windows -- and encouraging the use of alternative-energy systems that use the sun or new technology like fuel cells -- to reduce heating bills long term.
Additionally, the plan would lower energy prices to make heating more affordable by eliminating the energy Gross Receipts Tax for homeowners, and the plan would provide $100 million in new tax credits to help low-income New Yorkers pay for heat this winter.
"As the temperature dips, more and more New Yorkers are feeling the sting of rising energy costs," said Senator Bruno (R-C, Brunswick). "This plan couples energy cost relief with long-term savings that also will help make New York more energy efficient."
"Unfortunately, rising energy costs nationwide have not spared New Yorkers so we must take steps to cushion the impact of higher energy bills on our wallets and pocketbooks," said Senator Wright (R-C-I, Watertown). "This plan is both far-reaching and balanced, and is a responsible effort by state government to help protect public health and safety, while promoting the legitimate state interest of becoming more energy self-sufficient."
To address the state's critical need for additional energy supply brought on by increasing consumer and business energy demand, Senator Bruno said the Senate Majority plans soon to unveil new initiatives that would accelerate the state's power plant siting rules and offer additional incentives to increase energy supply.
The Senate Majority energy savings tax cut plan includes:
sales tax exemption for energy efficiency ($125 million) -- exempts from state and local sales tax all products designed to improve energy efficiency of existing homes, apartments and commercial and manufacturing businesses, including furnaces, boilers, insulation, weatherstripping, new thermostats and alternative energy systems like solar heat and fuel cells. This tax break typically will reduce the cost of these improvements by 8 percent, and includes a state reimbursement to local governments for their lost revenue;
repeal of residential Gross Receipts Tax ($250 million) -- the Senate Majority led the fight last year for repeal of the GRT energy tax for business and a partial reduction for homeowners. This proposal would include residential customers in the complete phase-out by 2005;
Home Energy Assistance Tax (HEAT) Credit ($100 million) -- the Senate Majority proposes to use surplus government assistance funds available through TANF to help low-income New Yorkers pay their heating bills. The credit would be available through low-income New Yorkers income tax returns and equal 25 percent of a family's state Earned Income Tax Credit, or $220 for an eligible family of four;
eliminate the Petroleum Business Tax on commercial heating fuels ($10 million) -- the state budget began in 1995 to lower the PBT on commercial heating fuel, used in apartment buildings and commercial properties and usually passed on to consumers in the form of higher business costs. The Senate Majority proposes to eliminate the tax, currently 5 cents per gallon, completely.
New York homeowners have been stung this winter by soaring fuel prices which threaten to raise the cost of home heating by 30 percent to 50 percent or more.
Last year, the Senate Majority led the fight to reduce and eliminate the GRT in order to help lower energy costs and stimulate economic development. This year's tax cut proposal is directed at easing the impact of price hikes on consumers.
"High energy costs make it tougher for families to stay warm, but they also sap our economic strength when we must continue to do all we can to strengthen New York's growing economy," Senator Bruno said. "This plan is a sensible way to help New Yorkers make ends meet."
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