'High' tax on energy concerns residents

Like many Utahns, Caryl Jarman was shocked when she opened her January natural gas bill.

Adding to her shock was the fact that city and state taxes made up nearly 10 percent of the $243.47 total.

Jarman, who had moved from Syracuse, N.Y., to a three-bedroom home above the state Capitol, said city and state governments are reaping a windfall as soaring energy prices squeeze consumers.

Jarman's natural gas bill included a franchise fee at 2 percent, Utah sales tax at 3.85 percent and a municipal energy tax at 4 percent.

"I don't see any reason for them to be so high," Jarman said. "If this continues we'll go back to New York. It's ridiculous."

According to data provided Tuesday by the Utah House Public Utilities and Technology Standing Committee, total taxes collected from electric and natural gas charges in the state rose to $94.7 million in 2004, up 33 percent from $70.9 million collected in 2001.

And those numbers don't include tax revenues from energy use reaped by local governments in 2005, when natural gas rates climbed 38 percent compared to 2004. Since state and municipal taxes on utility bills are a percentage of the total bill, the higher one's bill climbs, the more money city and state treasuries receive.

Lincoln Shurtz, legislative analyst for the Utah League of Cities and Towns, told legislators on Tuesday that 123 of 242 cities across the state impose some energy sales and use tax.

Of those 123, 41 cities have a rate less than the maximum 6 percent they can impose. Counties are not allowed to impose the tax on residents living in unincorporated areas.

"Of the roughly 2.4 million people in Utah, 1.7 million are subject to some energy sales and use tax," Shurtz said. "And of that number, 1.4 million are subject to the max rate at 6 percent."

Shurtz suggested that the state should consider lowering its 2 percent energy tax, which is imposed on all residents. He added that six cities are in the process of rolling back the tax or are in discussions to do so.

Tom Hardy, city manager for Bountiful, said even with rising natural gas rates, Bountiful has not seen a corresponding increase in revenues.

Hardy said the city's revenues from taxes on natural gas rose to $798,000 in fiscal year 2005, an 8 percent increase from $738,000 collected in fiscal year 2000-2001. But as prices rise, Hardy said, residents conserve. He pointed to the recent drought when residents were asked to conserve water.