New Rochelle Wants the Ability to Change Utility Tax Rate

In an effort to expand the city's revenue gathering options, the New Rochelle City Council adopted a resolution supporting state legislation that would allow it to increase taxes on utility services.

Assembly Bill 7745 and Senate Bill 5361 were introduced in Albany to enable New Rochelle to increase taxes on the gross income earned by utility companies from 1 percent to 3 percent.

"This legislation is not a change in our local utility gross receipts rate," said Mayor Noam Bramson. "It is providing New Rochelle with options."

Were the city to increase the tax rate to 3 percent, he said, there would be a net increase of $2.7 million in revenue.

"But we could set it anywhere between 1 percent and 3 percent, or leave it where it is today," Bramson said.

He said, if the city were given the ability to change the rate, that the benefits and drawbacks would be examined in the context of ways to raise revenue for the next budget.

"We are not in a position to judge whether it would be wise or not," Bramson said, until all the choices in creating revenue are weighed against each other.

Councilman Louis Trangucci, R-District 1, said his constituents were concerned with having to absorb another tax increase.

"It's not just hitting homeowners," he said, "but everyone is going to get hit with a utility tax increase."

Bramson said that was a legitimate concern, but raising tax revenue this way could be considered more palatable than a property tax because it would be applied to everyone who uses utilities including nonprofit organizations, and not just to home or business owners.

"The other argument in favor of it," he said, "is that rate payers have some control over the amount of a resource that they consume."

A person could choose to use less electricity or water and mitigate the increase that way, Bramson said.

He said no one is committing to raising the utility tax at this time.

"[We want to] make the best possible decision we can when the time comes in consultation with the people we represent," Bramson said.