Pataki considers cigarette tax hike
By MARC HUMBERT Associated Press Writer December 4, 2001, 2:43 PM EST
ALBANY, N.Y. -- Gov. George Pataki, facing a multibillion dollar revenue shortfall related to the Sept. 11 terrorist attacks, is considering raising the state's already highest-in-the-nation cigarette tax by up to 39-cents per pack, sources said Tuesday.
The sources, familiar with the deliberations of Pataki's budget advisers and speaking only on condition of anonymity, said the cigarette tax increase was one proposal under consideration as the governor seeks to deal with a potential $9 billion revenue shortfall.
Pataki, during an appearance in nearby Troy with state Senate Majority Leader Joseph Bruno, refused to rule out such an increase.
"I'm not going to comment on any specific element of the budget because we haven't put it together yet," he said. "We're doing our analysis and we'll being making decisions over the course of the next few weeks."
But Pataki also warned, "It's going to be a very difficult year coming up and we're all going to have to look to see how we can tighten our belts, reduce costs and operate more efficiently."
Bruno, a fellow Republican who generally opposes tax increases, said he would wait to see the governor's budget proposal for next year before commenting.
Such a cigarette tax increase, first reported Tuesday by the Buffalo News, would raise New York's per pack tax to $1.50.
Currently, New York's $1.11 per pack state tax is the highest in the nation, although state of Washington voters last month approved a tax increase to $1.42 per pack, effective in January.
There has also been some talk among state leaders about delaying already scheduled tax cuts due to take effect next year, but Pataki and legislative leaders haven't yet come up with specifics.
State Assembly Speaker Sheldon Silver, a Democrat who perhaps fears voter backlash in an election year, has said he is willing to consider tax increases or delays in tax cuts--if they are proposed by Pataki.
Pataki has said the state's revenue shortfall, which he blames in large part on the economic disruption caused by the terrorist attacks on the World Trade Center, could be up to $3 billion for the state fiscal year that ends March 31. For the next fiscal year, the shortfall could be as much as $6 billion, Pataki has warned. The state's current budget is more than $83 billion.
The governor had indicated earlier that because of the serious fiscal problems, he had hoped to give the state Legislature his budget proposal for fiscal 2002-03 by the middle of this month, about one month before it is legally due. That, according to Pataki, would give the Legislature extra time to work on the spending plan.
But the governor said Tuesday he wasn't certain how soon he would be able to deliver his budget proposal, noting that key sales and estimated income tax payments are due this month and need to be analyzed.
"We want to do it as quickly as we can with the maximum amount of information we believe is necessary," he said.
New York has chronically late budgets. The budgets, for the fiscal year that starts April 1, have been late for 17 straight years.
In 1999, Pataki convinced the Legislature to raise the state cigarette tax by 55-cents per pack, effective March 1 of last year. At the time, the increase was expected to raise an extra $340 million annually.
Supporters of the move said it would reduce smoking while opponents said it would hurt convenience stores and drive customers to Indian reservations or to other states where they could obtain cheaper cigarettes.
Also Tuesday, mayors from across the state held a news conference in Albany to caution state leaders that cities couldn't afford to have the state's fiscal problems shifted onto their shoulders. And, the state School Boards Association warned that with major increases in state aid unlikely school districts needed changes in state law to make it easier for them to cut costs.
Copyright © 2001, The Associated Press