With all due respect to Ace Frehley of KISS fame, New York has lost its groove. The Empire State is now in danger of losing a whole lot more unless Governor David Paterson and the Legislature get serious about tackling the state's overspending problem.
Recently, I thought I saw a glimmer of hope when Governor Paterson announced his "gap closing plan" to address the state's enormous budget deficit. Call me naive (or maybe just because I used to work in Brooklyn Heights), but I was hopeful that this was a sign that the real risk of fiscal calamity, growing voter outrage, and constant ridicule finally snapped the state's political leadership to attention, and they were serious about addressing the problem of spending billions more than they are collecting in revenues. But upon review, producing a gap closing plan in New York is another way of doing "more of the same."
Instead of addressing New York State's overspending, Gov. Paterson is looking to raise taxes on tobacco products yet again to finance the programs his state cannot afford. Within the plan is this provision:
Tobacco Products/Snuff/Little Cigars Tax (2010-11 Savings: $40 million; 2011-12 Savings: $40 million): The tobacco products tax on chewing tobacco, cigars, pipe tobacco and rolling tobacco would be increased from 46 percent of wholesale price to 90 percent of the wholesale price. The tax on snuff would be raised from $0.90 per ounce to $2.00 per ounce. Little cigars would be taxed consistent with the proposed cigarette excise tax of $3.75 per pack, rather than the current rate of 46 percent of wholesale price.
So rather than reform spending to bring it in line with revenues, Gov. Paterson would like to raise taxes again on already overburdened New Yorkers. Consumers already pay the fourth highest tobacco taxes in the United States, but that's still not enough for Gov. Paterson and the Legislature to finance the state's bloated budget.
If Governor Paterson wants to close the budget gap, he should be looking for ways to reform spending rather than adding to the problem.