Rockland County Legislators Vote 14-0 To Eliminate Residential Energy Sales Tax
Rockland County Legislators voted 14-0 tonight to eliminate the residential energy sales tax. The measure next goes to the County Executive, who has said he supports the tax cut.
The move comes prior to the arrival of colder temperatures and is expected to save taxpayers about $4 million in just the winter months alone, and about $10 million or more annually going forward.
The action fulfills the commitment made by the county Legislature and the Executive last year when the 2022 County Budget was amended, adopted and signed. The residential energy sales tax was put in place in 2012 and was to expire in 2025 after being extended due to the covid crisis.
Its termination now is the latest effort to bring meaningful tax relief:
— It follows a zero percent county property tax increase for 2022.
— It follows the elimination of the county motor vehicle registration tax in 2022.
— It follows the reduction of the county’s portion of sales tax on motor fuel purchases, capping the tax charged to the first $2 of a gasoline purchase. It is in effect through February of 2023.
The residential energy sales tax is scheduled to end as of Dec. 1. Due to when and how the state collects sales taxes, the Legislature and Executive are asking the state to waive the 90-day wait period – which would extend beyond Dec. 1. Otherwise, the tax would continue to be collected until the state’s next tax quarter, which starts March 1, when most of winter’s coldest temperatures are behind us.
The residential energy sales tax applies to all sources of energy, including natural gas, propane and home heating oil, as well as electricity, including electricity used for heat, to keep the lights on, and so forth. In recent years, it annually brought in about $12 million in revenues that were needed to help County government pay its bills during a fiscal crisis that dates back about a decade.
A $1.3 million savings is equivalent to about a 1 percent property tax increase; the $10 million-plus cut is equivalent to roughly a 7.5 percent property tax cut.
The motor vehicle registration tax, which also ends this year, annually brought in about $1.78 million in revenues and also dates to 2012 and the fiscal crisis. It was a $5 fee per car and a $10 fee per SUV, larger car or commercial vehicle over 3,500 pounds, paid every two years when a vehicle was reregistered with the state.
The tax reduction actions follow due diligence to make sure the County’s fiscal position remains strong. Top credit rating agencies have continued to boost the County’s credit scores as the County’s deficit was eliminated and its final payments on a bond taken out to assist the deficit-reduction effort that arose due to the fiscal crisis are set to end in 2024.
The County’s current credit ratings are AA from S&P Global, Aa1 from Moody’s, and A+ from Fitch Ratings. Importantly, both S&P and Moody’s issued “stable” outlooks and Fitch issued a “positive” outlook for the County’s ongoing creditworthiness.
