Diary

New York's budget is balanced! (Everyone buy $10 cigarettes and get cancer!)

New York. I just shake my head.

Do you really balance a state budget on cigarette taxes? Do you know what happens when you increase taxes? People pay the tax (a very few), or people stop smoking, or people break the law and find ways to buy cigarettes without paying the tax (go to New Jersey).

From the blog Politics on the Hudson:

Lawmakers approve cigarette tax hike, barely
This entry was posted on Monday, June 21st, 2010 at 6:29 pm by Nick Reisman.
(…)
Senate Republicans knocked the passage of the tax increase, saying it was a sign that Democrats plan more taxes in the final version of the budget.

“Today we are seeing just the start of the tax increases that Democrats will resort to in order to close a $9.5 billion budget gap,” Senate Minority Leader Dean Skelos said in a statement. “With much of the budget passed, there is little left to cut but, I expect the Democrats will find a lot more to tax.”

The per-pack-tax now grows to $4.35. New York will keep its place as the highest-tax cigarette state in the nation, well ahead of border states Vermont, Connecticut, Pennsylvania and Massachusetts.

The plan comes as lawmakers try to close a $9.2 billion deficit and approve a budget, now more than two months late. The cigarette tax, which Gov. David Paterson first proposed back in January, will raise $290 million revenue. Collecting taxes on cigarettes sold to non-tribal citizens on reservations, will net $150 million, according to Paterson’s Division of Budget.

So how exactly does $290 million in increased cigarette revenue (probably wishful thinking) close a $9.2+ billion budget gap?

You print money–oops, can’t do that as a state. You get another stimulus bailout–maybe. You cut union jobs–no, you can’t do that as a Democrat. You borrow yet again.

From today’s New York Post editorial:

Borrowing trouble
Posted: June 21, 2010
Gov. Paterson says he can’t understand why his handpicked lieutenant governor, Richard Ravitch, submitted a budget-balancing strategy that calls for $6 billion in borrowing when he knew the governor flatly opposed the idea.

We wonder as well.

“My budget plan was released Jan. 19, and his savings plan was released in the end of February,” Paterson said in a radio interview Thursday. “It included a borrowing component and how it would work if we wanted to borrow.

Today’s New York Daily News editorial loves the cigarette tax:

Vote the cigarette tax: Rejecting tobacco levy is hazardous to N.Y.’s health
Monday, June 21st 2010, 4:00 AM
Driven to dramatic action by New York’s derelict Legislature, Gov. Paterson is set to force lawmakers to approve a major hike in tobacco taxes before midnight tonight – or shut down state government.

Their only responsible option is to vote yes.

Some Daily News readers disagreed:

dabronx69
7:06:29 AM
Jun 21, 2010
that’s just great, another tax on mostly lower income folks. the democrat way, isn’t it? the only addicts in this conversation are politicians addicted to money and power. reduce actual spending? ya gotta be kidding!

This is from an ex-New Yorker (not me):

Ex New Yorker
7:26:08 AM
Jun 21, 2010

It never ceases to amaze me. Not one single job needs to be cut if NY’s municipal unions would agree to a 15% across the board pay cut. If faced with losing one’s job versus taking a pay cut, any level headed American would jump on the pay cut. NY is broke. The 1.2 million middle class people who’ve relocated since 2000 AREN’T COMING BACK! NY can no longer afford to support the salaries and benefits of an over-bloated municipal workforce. Cops and firemen should be spared, but all others need to be trimmed to affordable levels. You can’t get blood from a stone.

The budget is over two months late (yet again), and these shenanigans go on every year. But this year, they’re really out of money and can hardly take any more from future generations by more borrowing.

Keep voting Democrat and RINO.