Gov. Paterson’s budget to add more taxes

New York State Governor David Paterson proposed a $134 billion spending plan for New York State (NYS) for the upcoming 2010 – 11 financial year. This plan features $5.5 billion in cuts and $1 billion in tax increases to eliminate the state’s $7.4 billion deficit. The plan also includes thousands of job cuts.

Gov. Paterson plans to boost the payroll tax in New York City (NYC) to .54 percent, up from .34 percent. The revenue will go towards the Metropolitan Transportation Authority (MTA). Businesses in NYC would have to pay 54 cents for every $100 spent on payroll and businesses outside the city will pay 17 cents.

Mayor Michael Bloomberg is concerned about what the plan entails for NYC, saying that the city would have to lay off 18,500 employees including 8,500 teachers, 3,150 police officers and 1,050 firefighters as a result of Gov. Paterson’s plan to cut city funding by $328 million. 

Education major Taedra Pedonti stated, “It’s not fair that Gov. Paterson is putting children’s future on the line by firing teachers, it is already bad enough that he is putting people out of jobs. This is going to affect so many lives.” 

NYS School aid is being reduced by $1.1 billion schools affected will depend on their local districts wealth and student needs.

Some outcomes of the upcoming year’s financial plan include decreased street cleaners, litter collectors, reduced curbside garbage collection and laying off 500 parks personnel. 

Additionally, 15 senior centers will be shutting down and funding will be eliminated for 500 soup kitchens. “New York has worked so long to clean its streets and care for the homeless, this budget plan will diminish all the hard work,” student Kevin Ko said.

NYS plans to reduce high-tech funding, limit payments on some medical expenses, reduce reimbursements in nursing homes, eliminate three out of five statewide poison control centers and close certain highway rest areas. Health care funding for NYS will be decreased by $1 billion. 

Mayor Bloomberg does not agree with Gov. Paterson’s significant budget cuts, however, he hopes that his plan to raise money through taxes and fees by taxing common health hazards such as cigarettes and soda.

The proposed soda tax will cost drinkers an extra 1-cent per ounce. Therefore, a 16-ounce bottle will cost an additional 16 cents and a 64-ounce bottle 64 cents more. The estimated revenue generated from this tax will be $465 million.

Cigarette packs will cost $1 dollar more. Currently, the tax is $2.75, which will eventually be a cost of $3.75. The revenue expected from this tax is $218 million.

 Student and cigarette smoker Maxine Demko is in favor of this increased tax on cigarettes. “As a student it is already difficult to afford buying a pack of cigarettes daily, a pack going up one more dollar is a huge incentive to quit.  I am going to try and stop the habit before this tax is implemented, hopefully this tax will force fellow New Yorkers to do the same,” she said.

Another tax plan Gov. Paterson proposed will allow the sale of wine in grocery stores. This new policy will bring in $162 million dollars in liquor taxes.

Gov. Paterson also wants to legalize Ultimate Fighting again in NYS.  His intention is to raise income without additional taxing. The Ultimate Fighting Championship organization estimated one event would generate over $11 million dollars for NYS. Former NYS Gov. George Pataki banned Ultimate Fighting in 1997 because he considered it barbaric. 

“Is Paterson trying to encourage New Yorkers to drink wine and fight more?” Demko asked after learning about the future policies. “However, overall I am pleased with the new taxes because they are not going to heavily weigh down the everyday New Yorker. People, who choose to drink wine and soda, smoke and watch Ultimate Fighting choose to and now they will be also be choosing to help New York.”

Gov. Paterson’s proposal is the first step in the budget process. The Legislature is responsible for developing the final financial policy. The 2010– 11 NYS budget plans will be finalized on April 1, when the new fiscal year officially begins.