Energy Tax Talking Points for Elected Officials

Talking Points on Restoration of Energy Tax Receipts to Municipalities and Property Taxpayers 

• Taxes on gas and electric utilities are for the use of public land (the public right of way) for their equipment.
• These taxes were originally collected by the host municipalities, and when the State made itself the collection agent for these taxes, it promised to return the proceeds to municipalities for property tax relief.
• Just as municipalities collect property taxes for the benefit of school districts, counties, and other entities, the State is supposed to collect Energy Taxes for the benefit of municipal governments.
• For years though, State officials have diverted funding from Energy Taxes to plug holes in the State budget and to fund State programs. Instead of being spent on local programs and services or used to offset property taxes, the money has been spent as successive legislatures and administrations have seen fit.
• The diversion of dedicated energy tax receipts to the State’s General Fund has left many municipalities with serious needs and burdensome property taxes and it further jeopardizes this critical property tax relief funding for future years.
• Over the years, the State has reduced the Consolidated Municipal Property Tax Relief Aid (CMPTRA), which is also comprised of revenues that should be returned to municipalities, to avoid the “poison pill” and continue to collect Energy Taxes. Keeping additional revenue that should have been returned to provide property tax relief.
• Local elected officials are in the best position to decide the best use of these resources, which were always intended to fund local programs and services.
• We thank the legislature and Governor for the additional $75 million in Municipal Relief Funds but with a $10 billion surplus the time has come to restore to local budgets the millions in property tax relief that have been annually diverted to meet State needs.