Tuesday, January 19, 2010

NY Gov's Budget Has $1 Billion In New Taxes

NY Governor Paterson has announced a new $134 billion budget . It has major cuts but also contains huge new taxes, and may contain the seeds for a new black market.

School aid will be slashed by $1 billion. Health care will be slashed by another billion. Aid to NYC will be cut. "The mistakes of the past have lead us to the breaking point," Paterson said.

But in addition to the cuts, the governor said he would need to raise $1 billion in new taxes and fees.

His budget plan calls for a $1 increase in the cigarette tax, raising the state tax to $3.75, and a new soda tax that will cost consumers 1-cent per ounce.

The Governor may think he can just throw an additional tax of $1.00 a pack, but at some point the black market will take over and provide cigarettes tax free. When the black market becomes significant enough, tax revenues from the cigarette tax will actually decline.


  1. Wenzel,

    The NYT article I read described it as "relatively lean" considering other recent budget efforts in Albany... but then the article contradicted itself by noting that this budget is an increase from the previous one.


  2. This is typical gvt speak. A slowdown in spending is a lean budget.

    Despite the tax increase, and budget cuts in some areas,the budget itself actually increases.

    As you can note from the NYT piece, there is no explanation at all as to where the budget is growing.

    I have hunted around a bit to try and find it, but no public reports I seen have it. I'm sure it is buried in the details somewhere.

    Even during the Reagan years, when his budget "cuts" were beng hailed, it was only a slowdown in the growth of spending.

  3. Soda companies are good corporate citizens. They employ people in various communities and give to those communities in times of need. One of the first companies to respond to the tragedy in Haiti was Coca-Cola with a donation of $1 million dollars to the Red Cross. On the ground, Coca-Cola is getting four thousands cases of water through to Haiti each day. Keep going Coke -- Please keep helping!

    Governor Paterson should back off the soda. It is not the source of the obesity problem. Inferior physical and nutritional education, which of course leads to poor exercise habits and ill-advised diets, are the cause of inflated waistlines. Having a salad with a Coke is far better then a bottle of water to wash down a face full of dirty water dogs. Add walking up the stairs instead of taking the elevator and you’re golden.