Let's start with the math.
The city of Sacramento collected $43.8 million in utility user taxes during the last fiscal year. About 10 percent of that amount was from a tax on natural gas.
If natural gas prices double, as some predict, it means that the city will get $4.38 million more in annual revenues as a result.
So what's bad for consumers -- higher utility costs -- could be good for a government that collects taxes based on those soaring rates.
That fact is making taxpayer rights activists hopping mad.
"It's windfall revenue to the public agencies," said Larry McCarthy, president of the California Taxpayers' Association.
Not only have the taxes increased as the prices of natural gas and electricity have risen, McCarthy said, but the revenues have increased from things such as cable television and telephone lines, which have had dramatic increases in use in recent years.
"Public agencies are awash with money," McCarthy said. "Where are they spending it?"
Sacramento has a 7.5 percent utility tax for cable, telecommunications, gas and electric.
Although natural gas prices are rising, the city has yet to see an increase in revenues, said Assistant City Manager Betty Masuoka. It usually takes three months after the taxes are collected from Pacific Gas and Electric Co. before a final settlement is made to the city, she said.
When those revenues start coming in, there could be substantial increases -- averaging about $365,000 a month.
That's because "gas prices are going through the roof," said Jon Tremayne, a PG&E spokesman.
This is not news to Becky Danek, owner of Danek's Crestview Pastry in Carmichael, where she pays a 2.5 percent utility tax to Sacramento County. "As a small business, it hurts," Danek complained. "It's hard to pass this stuff on."
Danek's most recent gas bill was $365.97, including $8.93 in tax. Last year for the same period, the gas bill was $223 and the tax was around $5.57.
It doesn't seem like much, but a few dollars here and there over thousands of customers begin to add up, explained Dennis Neufeld, treasurer for the Sacramento City Taxpayers' Rights League.
He recommends adjusting what he calls "the gas and electricity tax windfall" and rebating some to taxpayers.
If the utility cost doubles, Neufeld said, the city should charge only 4 percent for the tax. It gives the city the same amount of money that it projected in its budgets before it received the "revenue windfall," he said.
What people aren't taking into account, however, is that the local governments are consumers too, said Gustavo Vina, the finance manager for the city of Sacramento. The cost of heating city buildings is also going up.
Other finance directors argue that it's just not that much money. Most people wouldn't see more than a $3 to $5 monthly savings if the utility tax were reduced to compensate for the rising cost of natural gas.
But don't dismiss $4 a month so easily, said Minnie Dawson, who owns Dawson's Lodge, a board and care home for the elderly in south Sacramento. That type of money is helpful to the elderly or anyone on a fixed income, she said.
Dawson's $299 PG&E natural gas bill for December more than tripled her $89 November bill. Her current bill is $362.86.
"I haven't had a bill this big in my life. I don't know what the hell is going on," she said.
The question of what's going on is also likely to arise in the small community of Winters in Yolo County, said Nanci Mills, acting city manager. The town gets 13 percent of its revenues from a 5 percent utility tax.
"It (the utility tax) hasn't been an issue yet, and I think the reason is that it's kind of early," Mills said. "I don't think the power bills have really hit yet. But I can guarantee that it will be a voice of concern when it does."
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