Long Islanders already pay among the highest utility rates in the country and now the governor is proposing to slap a utility tax on residents to help shrink the state's budget shortfall.

Gov. David Paterson (D-NY) and fellow democrats are pushing for a utility tax to raise $550 million annually. Long Island's Republican senators are opposed to the tax. "It's not the kind of thing you want to do in a recession," says Sen. Ken Lavalle (R-Port Jefferson).

Republicans say to add insult to injury Paterson is now launching a consumer outreach effort that directs the state to work with utility companies to help New Yorkers struggling to pay their bills. "The best thing he could have done is not create the tax," says Lavalle.

National Grid tells News 12 Long Island it will have to pass the tax along to its customers, but LIPA CEO Kevin Law says the power authority will do its best to absorb the assessment. Based just on average use, National Grid residential gas customers could see a $30 bump in their annual bills. If LIPA can't absorb the assessment, its electric customers would see a yearly increase of about $20.