NY Considers Additional Sales Taxes

Governor David Paterson has demanded that the legislature produce a completed budget document by this Monday or else he’ll simply bundle the remainder of his own budget proposals, which include increased sales taxes on soft drinks and cuts to local school districts, in the next emergency spending bill, legislation that would have to be approved if Albany wishes to avoid a potential government shutdown, according to the New York Daily News.

Yesterday’s threat was made on the same day that the governor and the heads of the Senate and Assembly took part in a closed door meeting to weigh their options in closing the state’s $9.2 billion budget deficit, according to New York 1. In addition to the proposals put forward by the governor himself, Albany is also considering a number of other potential taxes increases, including restoring the 4 percent sales tax on shoes and clothing, said the Buffalo News.

Though there is currently a sales tax on clothing, it right now only applies to purchases over $110. Making the tax once again apply to all clothing purchases regardless of price, a proposal that Paterson tried and failed to pass last year, would raise about $660 million over 12 months, less so if lawmakers include potential sales tax holidays, such as during back to school shopping in August, according to Bloomberg.

Since the state failed to pass its budget by the April 1 deadline, the government has funded itself through a series of emergency spending bills that have, at times, sparked contentious political struggles, such as when, about two weeks ago, Senators Rubin Diaz and Pedro Espada threatened to shut down the government over proposed service cuts in that week’s extender bill, a move that Paterson warned could lead to anarchy in the streets.

Despite the budget not passing on time, however, work continued throughout the weeks, with about 70 percent of the overdue budget having already been completed through these emergency spending measures, according to the Buffalo News. Still, the Albany Times Union reported that some legislative staffers said that the entire legislature may remain in Albany over the weekend in order to pass the 30 percent that still remains.