Increased Energy Prices to Cost Local Governments at Least $375 Million More this Year, Survey Finds
Local governments will have to spend at least $375 million more this year for gasoline, diesel, fuel oil, natural gas and electricity because of increased prices and millions more because of the impact of higher energy prices on the cost of goods and deliveries, according to a survey released today by New York State Comptroller Alan G. Hevesi. Hevesi reported the findings in a letter to Assemblyman Paul D. Tonko (D-Schenectady/Montgomery Counties), Chair of the Committee on Energy, who has held a series of statewide hearings on the impact of rising energy prices.
“The results of that survey demonstrate that these increases will have a dramatic and negative impact on local governments. Given the fragile balance in local government budgets, it is critical that the State develop effective short-term and long-term solutions to alleviate this crisis,” Hevesi wrote.
“School districts and local governments are struggling to cope with skyrocketing prices at the pumps and this winter they face double-digit price increases for heating fuels and electricity,” said Tonko. “I look forward to working with Comptroller Hevesi to protect cash-strapped local property taxpayers and the fiscal health of our schools and municipalities.”
The Comptroller's Office received responses from 124 local governments of the 648 to which it sent the survey. New York City was not surveyed and is not included in the projections. The results include the following:
The costs for gasoline, diesel and fuel oil for local governments are approximately $1 per gallon higher today than the average cost during the most recently completed fiscal year, roughly a 70 percent increase. Natural gas and electricity costs are estimated to be 35 and 11 percent higher, respectively, than last year.
More than 75 percent of respondents said that the rise in energy costs would produce a shortfall in their current budgets.
If the percentage increase in total energy costs is consistent by type of government throughout the State, overall local government expenditures will increase $375 million. When broken down for each type of local government, excluding New York City, potential increases are as follows:
School Districts $ 200 million
Counties $ 70 million
Cities $ 35 million
Towns $ 50 million
Villages $ 20 million
There will be additional, indirect impacts of rising energy prices. For example, supplies and materials vendors are applying surcharges, shipping charges are going up, and paving and road construction contractors are demanding energy surcharge increases. Many vendors have indicated that charges for basic services will be higher for the remainder of 2005 and may increase again in 2006. These indirect costs are not included in the cost estimates above.