TRENTON, NJ – New Jersey’s government bank accounts are about to see a huge increase in tax revenue collected from anyone who pays an electric bill, thanks to a 20% price hike that went into action on June 1st.
While residents are paying record-high prices for energy, the state, and Governor Phil Murphy’s administration will be collecting a record-high amount of energy tax starting next month.
A new bill in Trenton seeks to stop the state from profiting off everyday New Jerseyans, but Democrats are putting up a fight.
Senator Joe Pennacchio (R-26) sharply criticized state Democrats and the Murphy administration on Tuesday for what he called a profiteering approach to rising utility bills. Speaking at the Senate Economic Growth Committee, Pennacchio pointed out that New Jersey could see an $85 million windfall from taxes and fees tied to soaring utility costs.
“New Jersey is expected to collect up to an $85 million windfall from fees and sales taxes applied to soaring utility bills this summer. It’s shameful for taxes to go up as utility bills skyrocket,” said Pennacchio. The senator emphasized that legislation he sponsors with Senator Latham Tiver (R-8) would provide immediate relief by placing a moratorium on the Societal Benefits Charge (SBC) and sales tax on utility bills.
Pennacchio and Tiver sponsor Senate Bill 4398, which aims to suspend these taxes amid a 20% increase in electricity prices. However, the proposal faced strong opposition from Democratic lawmakers.
On June 2, Trenton Democrats voted against a Republican amendment to a broader bill, A-5466/S-4318, that would have brought financial relief to ratepayers.
“Democrats continue to block efforts that would provide immediate financial relief to New Jersey families,” Pennacchio said during the committee hearing. “This is an opportunity to give back money that is unfairly being collected through taxes.”
Senator Pennacchio’s criticism of Trenton Democrats
Pennacchio’s criticism extended beyond the Legislature, targeting the Murphy administration and its handling of New Jersey’s energy sector. “The BPU has the regulatory oversight over what the utilities make, but this Legislature has oversight over how much sales tax we collect from the utilities,” he stated. He argued that the government’s excessive add-on charges are driving up energy costs, which are already rising due to supply and demand pressures.
The senator pointed out that suspending these add-ons would help reduce utility costs. “If you stop adding excessive costs to energy bills, those costs will come down. It’s that simple,” he added.
Concerns over New Jersey’s energy policies
Recently, former Board of Public Utilities (BPU) Commissioner Mary Anna Holden and PJM spokesperson Jeff Shields have written op-eds criticizing New Jersey’s aggressive electrification mandates and the forced retirement of power generators. They argue that these policies have destabilized the state’s energy supply and further increased costs for residents and businesses alike.
Pennacchio echoed these concerns, stating that these policies are contributing to the financial strain facing families in New Jersey.
In a state grappling with rising costs, Pennacchio’s call for action underscores the growing debate over how best to balance environmental goals with the economic impact on consumers.
State Democrats have yet to respond to Pennacchio’s allegations, though further discussions are expected in upcoming legislative sessions.
