A Tax is a Tax is a Tax

April 29, 2011

“I don’t see how you pass a tax on generators that doesn’t get passed onto the consumer.”

Hartford, CT – A proposal to tax electric generating plants in Connecticut was unveiled recently by the co-chairs of the Energy and Technology Committee. Senator Joe Markley (R-16) believes this proposal is a direct response to his lawsuit concerning a hidden tax on all electrical bills.

“The fact it’s taking so long for the Supreme Court to decide whether the hidden tax is constitutional has to be making the proponents of this new tax nervous. If they believe the court is going to throw out the hidden tax, I think they’d repeal it first, and try to take the credit for doing so,” said Senator Markley.

The surcharge is a way to pay back utility companies for their investment in deregulation. As it stands, there is a hole of $646 million in the state budget, which represents future revenues from bonds the state hopes to issue.

The constitutionality of the hidden electrical tax is presently under consideration by the State Supreme Court. Senator Markley sued, claiming the tax is unfair because it doesn’t affect all rate payers equally, and because the tax was imposed by a state agency, not the legislature.

“The legislature has to think about a way to cover the money in this current budget and this new tax proposal could be a probe in that direction,” said Senator Markley. “I say the answer is to cut spending and do no further borrowing.”

The new proposal to tax electrical generation would seek to raise enough money to eventually get rid of the ‘hidden tax’. Senator Markley believes this plan continues to burden rate payers, adding, “A tax is a tax is a tax. I don’t see how you pass a tax on generators that doesn’t get passed on to consumer.”

Senator Markley’s case at the State Supreme Court was presented in March.

“Every day that goes by on it I feel a little more optimistic that the court will see it our way,” said Senator Markley.