By Assemblyman Alex Sauickie

Happy new year to all! The good news is that it’s the beginning of a new year, with all the hope and opportunity that brings. The bad news, unfortunately, is that it’s also the beginning of the coldest part of winter, and home heating costs are soaring.

Some of this is due to market forces, but much of it is due to bad government policies on energy. The new federal law inaccurately named the “Inflation Reduction Act” includes a number of energy tax hikes that took effect on New Year’s Day.

Americans for Tax Reform provides a summary of these hikes. One is a tax on American oil and gas development that will sock middle-class families right in the wallet. Almost three out of every four New Jersey households use natural gas as their primary heating fuel, according to the U.S. Energy Information Administration. 

The methane tax alone will increase the average family’s natural gas bill by 17%, as estimated by the American Gas Association. So much for the President’s promise not to raise taxes on those making under $400,000 annually. 

Another new tax is a $12 billion, 16 cent per barrel tax on crude oil and imported petroleum products. Even worse than this initial tax is that it’s pegged to inflation, so as historic inflation continues to reduce the buying power of every dollar you earn, it will also further increase the amount you have to pay for energy. Again, those with incomes below $400,000 aren’t exempt, despite political promises.

It doesn’t even stop there. A $1.2 billion tax hike on coal will hit households that use coal-generated electricity to heat their homes. Further, there’s also a $225 billion corporate income tax increase that will be passed along to consumers in various ways, but it will hit the coal industry more than others according to the Tax Foundation.

Here in New Jersey, the state Board of Public Utilities, a body appointed by the Governor, recently approved double-digit rate increases for the state’s four largest gas providers. These rate hikes range from 15 to 25 percent and are expected to increase the average household’s energy bill by about $300 annually.  

There’s not much we can do about the new federal taxes, but part of your energy bill includes yet another tax, the state sales tax. We can provide some relief to energy customers by exempting from that state tax all retail sales of natural gas and electricity to residential customers. 

I’ve introduced bipartisan legislation (A4986) to provide this tax relief until April 2023 due to the urgent need to make heating your home more affordable this winter. However, I intend to work with my colleagues in the Legislature to assess whether this should be done every year.

With general inflation making basic goods and services more expensive, it’s hard enough to pay high energy bills made even higher by government policy. It’s time to provide some relief from high winter heating costs. The residents of New Jersey need a break, and shouldn’t have to make financial decisions about simply staying warm.

Alex Sauickie represents New Egypt and 13 other towns in the State Assembly.

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Note: This opinion piece originally appeared in The Jackson Times by Jersey Shore Online in its publication dated January 21, 2023.