[join us if you can for rally on all this-- tomorrow (Mon. Feb. 20th) 12:30 pm
in front of the Mobil gas station in Poughkeepsie on Mansion St. next to the
main post office and opposite City Hall!...Joel (444-0599)]
[see below-- much, much more on all this-- from Matt Taibbi, also info re:
Hinchey/Sanders legislation, new Think Progress report-- and petition
I originally launched seven years ago tackling this very same issue(!):
(of excessive speculation driving up price of gasoline and heating oil)
http://new.petitiononline.com/htngoil/petition.html -- 107 on board so far;
sign on if you haven't yet; will try to get Co. Leg. resolution passed too]
[finally-- check out JoelforCongress.org-- this has long been one
of my key campaign issues-- even since last summer!]
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From the front page of today's Poughkeepsie Journal
Gasoline price may hit record: Experts say cost could increase to $4.25 a gallon by late April
8:11 AM, Feb. 19, 2012 |
NEW YORK — Commuters are facing another hit to the wallet: Gasoline prices have never been higher this time of the year, and experts say prices may hit record levels.
At $3.53 a gallon, prices are already up 25 cents since Jan. 1. And experts say they could reach a record $4.25 a gallon by late April.
“You’re going to see a lot more staycations this year,” says Michael Lynch, president of Strategic Energy and Economic Research. “When the price gets anywhere near $4, you really see people react.”
The surge in gas prices follows an increase in the price of oil. Oil around the world is priced differently. Brent crude from the North Sea is a proxy for the foreign oil that’s imported by U.S. refineries and turned into gasoline and other fuels. Its price has risen 11 percent so far this year, to around $119 a barrel, because of tensions with Iran, a cold snap in Europe and rising demand from developing nations. West Texas Intermediate, used to price oil produced in the U.S., is up 4 percent to around $103 a barrel. That’s 19 percent higher than a year earlier.
A 25-cent jump in gasoline prices, if sustained over a year, would cost the economy about $35 billion. That’s only 0.2 percent of the total U.S. economy, but economists say it’s a meaningful amount, especially at a time when growth is only so-so.
High oil and gas prices now set the stage for sharper increases because gas typically rises in March and April. The Oil Price Information Service predicts gasoline could peak at $4.25 a gallon by the end of April. That would top the record of $4.11 in July 2008.
Americans spent 8.4 percent of their household income on gasoline last year when gas averaged an all-time high of $3.51 a gallon — double the percentage a decade ago.
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From http://hinchey.house.gov/index.php?option=com_content&task=view&id=1666&Itemid ...
Hinchey, DeFazio and Welch Introduce The End Excessive Oil Speculation Now Act
Thursday, 23 June 2011 15:57
Washington, D.C. -- Congressman Maurice Hinchey (D-NY), Congressman Peter DeFazio (D-OR) and Congressman Peter Welch (D-VT) today introduced The End Excessive Oil Speculation Now Act to compel federal commodity regulators to halt excessive oil speculation that has driven up gasoline prices. A companion bill has already been introduced in the U.S. Senate by Senator Bernie Sanders of Vermont.
"Even Wall Street insiders and representatives from Big Oil are quick to admit that speculation is driving up prices," said Hinchey. "This legislation would immediately implement new rules to ensure the price of fuel is based on supply and demand - not the whims of greedy speculators. Last year, we gave federal regulators the authority to stop rampant speculation, but so far they have failed to act. This new bill would require immediate action. Middle class families and small businesses who are paying the price for rampant speculation simply cannot afford to wait any longer."
"I have been fighting for years to reign in excessive, unnecessary Wall Street speculation that is driving up the price of oil and other commodities," DeFazio said. "This legislation is crucial to cracking down on rampant speculation, restoring sanity to commodity markets, and providing relief to American consumers at the pump. "
"Speculation is driving up gas prices, causing hardship for Vermonters and threatening the economic recovery," said Welch. "With consumers paying a speculative premium of 60 to 70 cents a gallon, we need to shut down casino-style gambling in the markets."
Even energy experts from Exxon Mobil, Delta Airlines and Goldman Sachs have recently indicated that excessive speculation is responsible for 20 to 40 percent of the price of a barrel of crude oil. Gas prices nationwide are hovering at $4 per gallon, even though supply is greater and demand lower than two years ago when prices averaged about $2.44 a gallon nationwide.
A provision in last year's Wall Street reform law required federal regulators to clamp down on speculators, but the Commodity Futures Trading Commission (CFTC), which is charged with implementing the regulations, has not yet done so. New limits on speculators were required to be in place by January 17. Now, five months after the deadline, the commission still has failed to act and the American people are paying the price. Gasoline prices have gone up by about 60 cents a gallon since January.
The End Excessive Oil Speculation Now Act would force the chairman of the commission to establish strong position limits to eliminate excessive oil speculation. It also would impose margin requirements so investors would have to back their bets with real capital. In addition, bank holding companies, investment banks or hedge funds that engage in proprietary oil trading would be classified as speculators. The commission's chairman would be given broad power to take any other actions needed to ensure that the price of crude oil, gasoline, diesel fuel, jet fuel and heating oil accurately reflects the fundamentals of supply and demand.
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From http://thinkprogress.org/romm/2012/02/08/421061/big-oil-higher-prices-record-profits-less-oil/ ...
Big Oil’s Banner Year: Higher Prices, Record Profits, Less Oil
By Climate Guest Blogger on Feb 8, 2012 at 9:50 am
Top Five Oil Companies Made $1 Trillion in Profits from 2001 Through 2011
by Daniel J. Weiss, Jackie Weidman, Rebecca Leber
General economic theory holds that companies will produce more of a good if its price is higher, or if it receives subsidies. Funny that these rules didn’t seem to apply to Big Oil in 2011, when the highest oil price since 1864 and $2 billion in subsidies to the five largest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—yielded lower oil production than in 2010. But these five oil companies combined made a record-high $137 billion in profits in 2011—up 75 percent from 2010—and have made more than $1 trillion in profits from 2001 through 2011. This exceeds the previous record of $136 billion in profits in 2008.
Here are some more highlights from the big five’s activities in 2011:
They produced 4 percent less oil and “oil equivalent” in 2011 compared to 2010.
They spent a total of $38 billion, or 28 percent, of their profits to repurchase their own stock.
They are sitting on more than $58 billion in cash reserves as of the end of 2011.
They spent $1.6 million on campaign contributions and $65.7 million on lobbying efforts.
For every $1 spent on lobbying in Washington, the big five received $30 worth of tax breaks.
Let’s dig a little deeper into this mystery to see why these companies are making more money while Americans see less oil and pay more at the pump.
Where the money goes
In spite of these high profits and oil prices, oil-equivalent production fell from 2010 levels for four of the big five oil companies. Shell’s profit, for example, increased by 54 percent from 2010 to 2011 while its oil and natural gas production decreased by 3 percent during the same time period.
So if the big five companies are not using their additional earnings to increase production, what are they spending their money on? The answer: They’re buying shares of their own stocks and investing in politicians to maintain the policies that led to their enormous profits over the past decade.
Instead of heavily investing in job creation or production, the big five used $38 billion, or 28 percent of annual net income, to repurchase their own stocks. This practice enriches shareholders but it doesn’t add to oil supplies or investments in alternative fuels or other new technologies.
These companies also cling to tax breaks while maintaining $58 billion in cash reserves. This is nearly 30 times more than the estimated $2 billion in annual special tax breaks that these companies receive.
Tax breaks, but not more jobs
ExxonMobil, the most profitable of the big five, paid an effective tax rate of 17.6 percent (from 2008–2010 data), which is 3 percent less than what the average American family paid. But Exxon and other oil companies that receive these tax breaks do not pass benefits on to consumers. Instead, their board members, executives, and shareholders are the ones that profit.
These companies, along with the American Petroleum Institute—their political arm—fight relentlessly to keep their tax breaks intact by threatening economic and energy damage. API claims that eliminating tax loopholes for the oil and gas industry would “lose jobs … and energy production.” Yet higher oil prices and profits, combined with huge reserves and tax breaks, yielded lower, not higher, employment and oil production.
Last year, the Democrats on the House Natural Resources Committee released “Profits and Pink Slips: How Big Oil and Gas Companies are Not Creating U.S. Jobs or Paying Their Fair Share.” This report revealed:
Despite generating $546 billion in profits between 2005 and 2010, ExxonMobil, Chevron, Shell, and BP combined to reduce their U.S. workforce by 11,200 employees over that time.
Nor are many of these net revenues used for oil production. The report found that “among the Big 5 oil companies, less than 10 percent of profits are reinvested into exploration of new oil deposits.”
The report also concluded that:
The oil and gas industry is a mature and highly profitable sector that is no longer in need of generous tax breaks or royalty free drilling. The $43.6 billion in tax subsidies that the industry is set to receive over the next decade will not help consumers with rising energy costs.
One place where oil companies have no trouble spending money, however, is in Congress. Last year the big five spent $65.7 million on lobbying efforts, successfully persuading their congressional friends to retain tax breaks. Both the House and Senate had votes to scale back these tax breaks, and both proposals were defeated.
And Big Oil’s lobbying expenditures were quite a bargain. For every $1 the big five spent on lobbying in D.C. last year, they effectively received $30 in subsidies disguised as tax breaks. This is equivalent to a 3,000 percent return on every dollar they invested in strong-arming Congress.
More than $1.6 million was spent on campaign contributions in 2011 from just four of the top five oil companies. And more than 90 percent of these campaign contributions were made to Republican candidates or committees. But that doesn’t even include their undisclosed contributions to the U.S. Chamber of Commerce, the American Petroleum Institute, or other organizations that also support tax breaks for Big Oil.
In the spirit of giving, three of the five Big Oil CEOs—Rex Tillerson of ExxonMobil, John Watson of Chevron, and Jim Mulva of ConocoPhillips—contributed an additional $75,000 to GOP candidates and committees.
Enough is enough
Two days after his State of the Union address last month, President Obama spoke in Aurora, Colorado, about American-made energy. He reiterated his call to eliminate tax breaks for Big Oil:
We subsidized oil for a very long time, long enough. It’s time to stop giving taxpayer giveaways to an industry that’s never been more profitable.
Seventy-four percent of Americans agree with the president’s desire to eliminate tax breaks for the oil and gas industry.
Instead of benefiting oil companies that reward senior executives, board members, and stockholders, these taxpayer funds should be invested in projects that benefit all Americans. A University of Massachusetts study found that investment in clean energy creates anywhere from two to four times more direct and indirect jobs compared to the same investment in oil and gas production.
But let’s put these tax breaks in context. Ending the $2 billion in annual tax breaks for the big five oil companies could pay for:
The salaries of 36,000 high school teachers earning an average of $55,000 per year
Pell Grants for more than 500,000 aspiring college students
Sixty-seven thousand home solar energy systems costing an average of $15,000, which would reduce carbon dioxide pollution by 175,000 metric tons annually
Last September while addressing economic growth and deficit reduction, President Obama noted that as we cut federal program funding to reduce the budget deficit, “Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both.”
After a year of near-record profits and a decade of more than $1 trillion in total profits, the least the five huge oil companies can do to help our nation is to relinquish their unnecessary and ineffective tax breaks.
Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy, Jackie Weidman is a Special Assistant, and Rebecca Leber is a Research Assistant at American Progress.
Special thanks to Gabe Manion and Linda Benesch, who are both interns with the Think Progress War Room.
 In 2010 BP suffered a net loss of $4 billion due to its huge expenditures related to the BP Deepwater Horizon oil disaster. If BP is excluded from profit calculations in 2010 and 2011, the four remaining companies had a 36 percent increase in profit.
 On March 1, 2011, the House voted 249-176 to defeat a “Motion to Recommit [that] would repeal oil and tax production tax breaks for major integrated oil companies.” On May 17 the Senate voted 52-48 on a motion to proceed to the Close Big Oil Tax Loopholes Act, S. 940. Sixty votes were required to end debate and proceed to the bill, so it failed.
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"Wikileaks: Speculators Helped Cause Oil Bubble"
by Matt Taibbi
POSTED: May 26, 5:00 PM ET
When oil prices surged to a ridiculous $147 a barrel in the summer of 2008, conventional wisdom held that normal supply and demand issues were the cause. Both the Bush administration (in the form of the Commodity Futures Trading Commission) and most of Wall Street (through both media figures and market analysts) blamed such factors as increases in oil demand from the Chinese industrial machine, and the failure of Americans to conserve, for the surge in crude prices.
Goldman Sachs, while outrageously predicting a "super spike" that might cause oil to reach as high as $200 a barrel, blamed piggish American consumers and preached conservation as a bulwark against oil supply disruptions. The bank's "Oracle of Oil," Arjun Murti, even broadcast the fact that he owned two hybrid cars.
Well, thanks to Wikileaks, we now know that when the Bush administration reached out to the Saudis in the summer of '08 to ask them to increase oil production to lower prices, the Saudis responded by saying they were having a hard time finding buyers for their oil as it was, and instead asked the Bush administration to rein in Wall Street speculators.
According to the McClatchy report, the Wiki cables show that Saudi ministers repeatedly told Bush administration officials that increasing production might be counterproductive.
The cables show that at the height of the bubble, in May 2008, U.S. officials met in Riyadh with the Saudi assistant petroleum minister, Prince Abdulazziz bin Salman bin Abdulaziz al Saud, who told the U.S. he was "extremely worried" that high prices would destroy the demand for crude.
"Aramco is trying to sell more, but frankly there are no buyers," he reportedly said, referring to the Saudi state oil company. "We are discounting buyers."
The issue here, which I covered somewhat in Griftopia and in "The Great American Bubble Machine," revolves around the influx of speculative money into the commodities markets. Because of various changes to the way commodities were traded -- including a series of semi-secret exemptions handed out to commodities speculators, allowing companies like Goldman Sachs to popularize commodities speculation -- there was, by the summer of 2008, a cascade of investor money pouring into commodities, mostly all betting on a rise of commodity prices. Much of this might have been due to money flowing out of mortgages and into the "safe" haven of commodities, with exploding energy prices being an unwelcome side effect. While there was less than $20 billion of speculative activity in commodities in the early 2000s, by 2008 that number had jumped up to well over $200 billion, with virtually all that money being "long" money, i.e. bets on a rise in prices. All of that new money turned into a battering ram pushing prices through the roof. We are seeing the same phenomenon this year.
The Wiki documents show that the Saudis had long ago concluded that this increased investor flow was a threat to disrupt the markets. An embassy cable from 2007 recounted a meeting U.S. officials had with Yasser Mufti, an Aramco planner. "The Saudi analysts indicated a link between higher oil prices and the influx of investor funds into the oil markets," it read.
The cables also show that the Saudis urged the Americans to enact reforms to rein in Wall Street, calling for speculative limits and other changes. It also showed that some Saudi officials believed that speculation added as much as $40 to the oil price during the height of the bubble.
All of this is significant because both the Bush administration and the Obama administration have denied this narrative to various degrees. The CFTC only recently admitted that speculation played a role in the 2008 mess, having originally (and stubbornly) blamed supply and demand issues. Subsequent analyses have shown that the Saudi position, that worldwide demand for oil never increased nearly enough to account for the gigantic 2008 price spike, was almost certainly correct.
More on this to come later. Given the surge in commodities prices in the last year (which may in part have caused the rise in food prices that led to disturbances in the Middle East) and the Obama administration's seeming reluctance still to rein in speculators, it's remarkable that this issue doesn't get more press. It'll be interesting to see how much ink these Wiki cables get.
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Recall my http://new.petitiononline.com/htngoil/petition.html effort from seven years ago on this...
[join 107 folks already signed on to this if you haven't already!]
To: U.S. Congress and Dutchess County Legislature
Are you tired of barely being able to afford home heating oil or gasoline-- while the oil companies' profit statements continue to break records?
There is something you can do about it-- actually, five things:
1. Sign this petition.
2. Call Congress toll-free at (888) 355-3588.
3. Call our County Legislature at 486-2100.
4. Email our County Legislature at CountyLegislators@co.dutchess.ny.us.
5. Pass it on.
324 Browns Pond Road
Staatsburg, NY 12580
[Here below is the letter and resolution I sent to my colleagues in our County Legislature on the morning of October 31, 2005.]
Colleagues-- really think we as a County Legislature could and should be more pro-active on this issue, to protect our county's consumers and taxpayers...
All-- please let me know if you're interested in working with me on this issue...(no matter which party you are!)...
[would love to come to consensus on this sooner instead of later!]
PROTECT COUNTY TAXPAYERS FROM SKYROCKETING HOME HEATING OIL AND GASOLINE PRICES
WHEREAS, the price of home heating oil is already fifty-six cents a gallon higher than a year ago; according to the New York State Research and Development Association, the weekly average home heating oil price this fall in the lower Hudson region including Dutchess County is forty-six percent higher than last year; the price of gasoline is over a dollar higher than just two years ago, and
WHEREAS, local taxpayers across our state 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 recently by our state Comptroller, and
WHEREAS, the Foundation for Taxpayer and Consumer Rights recently discovered internal oil company memos that show how the industry intentionally reduced domestic refining capacity to drive up profits; three internal memos from Mobil, Chevron, and Texaco show different ways the oil giants closed down refining capacity and drove independent refiners out of business, and
WHEREAS, the confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990's in order to raise the price at the pump; large oil companies have for a decade artificially shorted the gasoline market to drive up prices, and
WHEREAS, the five largest oil refining companies operating in this country, ExxonMobil, Valero, ConocoPhillips, Shell and BP, have recorded $228 billion in profits over the last five years; oil and gasoline prices were rising long before Hurricane Katrina wreaked havoc; gasoline prices jumped 14\% from July 25 to Aug. 22; profits for U.S. oil refiners have been at record highs; in 1999, U.S.oil refiners made 22.8 cents for every gallon of gasoline refined from crude oil; by 2004, they were making 40.8 cents for every gallon of gasoline refined, a 79\% jump, and
WHEREAS, over 2,600 mergers have been approved in the U.S. petroleum industry since the 1990's; in just the last few years, mergers between giant oil companies-- such as Exxon and Mobil, Chevron and Texaco, Conoco and Phillips-- have resulted in just a few companies controlling a significant amount of America's gasoline, squelching competition, and
WHEREAS, in 1993, the five largest U.S. oil refining companies controlled 34.5\% of domestic oil refinery capacity; the top ten companies controlled 55.6\%; by 2004, the top five-- ConocoPhillips, Valero, ExxonMobil, Shell and BP-- controlled 56.3\% and the top ten refiners controlled 83\%; as a result of all of these recent mergers, the largest 5 oil refiners today control more capacity than the largest 10 did a decade ago, and
WHEREAS, contracts representing hundreds of millions of barrels of oil are traded every day on the London and New York trading exchanges; an increasing share of this trading, however, has been moving off regulated exchanges such as the New York Mercantile Exchange (NYMEX) and into unregulated Over-the-Counter (OTC) exchanges; the Bank of International Settlements estimates that in 2004, the global OTC market has grown to over $248 trillion; growth in global OTC derivatives markets has averaged 31.6\% since 1990, and
WHEREAS, traders in OTC exchanges are not required to disclose such information allowing companies like Goldman Sachs, Morgan Stanley and hedge funds to escape federal oversight and more easily engage in manipulation strategies; a recent congressional investigation concluded that "crude oil prices are affected by trading not only on regulated exchanges like the NYMEX, but also on unregulated OTC markets that have become major trading centers for energy contracts and derivatives. The lack of information on prices and large positions in OTC markets makes it difficult in many instances, if not impossible in practice, to determine whether traders have manipulated crude oil prices," and
WHEREAS, Exxon Mobil announced a third-quarter profit in October of nearly $10 billion, the largest corporate quarterly profit ever, and more than $4 billion dollars more than the company brought in during the third quarter of last year, and
WHEREAS, all of the other major oil companies have recently experienced record-breaking profits as well; these staggering profits come at a time when Dutchess County's consumers are faced with skyrocketing prices for gas and home heating oil, and
WHEREAS, oil companies like Exxon Mobil should not be allowed to rake in obscene profits while Dutchess County residents are struggling to pay skyrocketing gas and home heating oil prices; senior citizens will go cold this winter, and workers will lose a significant part of their pay checks if we do not address and end this price gouging, and
WHEREAS, the nearly $10 billion profit reported by Exxon Mobil in October represents only the profits earned in the last three months of the year; this means that Exxon Mobil's third quarter profits would be more than Coca-Cola Co., Intel Corporation and Time Warner Inc. earn in an entire year, and
WHEREAS, similarly BP reported a $6.53 billion third-quarter profit, up from $4.87 billion in the same period last year; ConocoPhillips Co. third-quarter profits increased by 89\% from last year's level, going from $2 billion last year to $3.8 billion this year; Royal Dutch Shell's profits increased by 68\%; and Marathon Oil's profits more than tripled, and therefore be it
RESOLVED, that the Dutchess County Legislature shall hold an evening public hearing within thirty days on gouging in home heating oil and gasoline prices, invite Rep. Sue Kelly, Rep. John Sweeney, Rep. Maurice Hinchey, Sen. Hillary Clinton, and Sen. Chuck Schumer, and be it further
RESOLVED that the Dutchess County Legislature hereby requests that Congress and the Federal Trade Commission without further delay seriously and publicly investigate with public hearings price gouging by the oil companies regarding home heating oil and gasoline prices and enact a tax on windfall profits by oil companies as many in Congress have suggested, and be it further
RESOLVED, that a copy of this resolution be sent to County Executive William Steinhaus, President George W. Bush, Sen. Hillary Clinton, Sen. Chuck Schumer,
Rep. Maurice Hinchey, Rep. Sue Kelly, and Rep. John Sweeney.
"Stay Warm-- the Safe Way" by Rebecca Imperati [Poughkeepsie Journal 9/25/05]
"Call for Government Reform Committee to Hold Hearings on Oil Company Price Gouging" [10/27/05]
"Internal Memos Show Oil Companies Intentionally Limited Refining Capacity To Drive Up Gasoline Prices"
[from Foundation for Taxpayer and Consumer Rights (9/7/05)]
"Testimony of Tyson Slocum, Research Director Public Citizen’s Energy Program Before U.S.Senate Committee on Commerce, Science & Transportation Causes and Solutions for America’s High Gasoline Prices" [9/21/05]
"New Survey of Dutchess County Gas Prices" [10/7/05]
Date: Thu, 27 Oct 2005 14:31:36 -0400: AcXbBozBaMzf9P/FS2CkJ9zJFrmznwAHhSPg
From: CGrimm@osc.state.ny.us [mailto:CGrimm@osc.state.ny.us]
Sent: Thursday, October 27, 2005 10:55 AM
Subject: Increased Energy Prices to Cost Local Governments at Least $375 Million More This Year, Hevesi Survey Finds
CONTACT: Jennifer Freeman
(518) 474-4015 FOR RELEASE: Immediately
October 27, 2005
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, fuel oil, natural gas and electricity 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.
Office of the State Comptroller
And Community Relations