Budget Defict and the Indians

As Newsday is reporting, the Indian cigarette bill is before the governor: "A bill to collect state sales tax on cigarettes sold by Indian retailers to non-Indian customers is now on Gov. David Paterson's desk, awaiting his signature or veto. The Assembly delivered the legislation to the governor Thursday, beginning a 10-day clock that gives him until Dec. 23 to make a decision that, either way, is certain to provoke anger. Supporters believe collecting the tax would bring the state $400 million in revenues at a time when Paterson is telling New Yorkers that budget deficits will likely have them paying more to renew drivers licenses and enroll in public colleges."

If the governor vetoes the measure-something that past behavior indicates is likely ("Similar bills have been passed but not enforced by previous administrations.")-than the issue will be thrown into the upcoming budget battle, where the state must find a way to address a $1.2 billion shortfall-one that will mushroom as high as $14 billion next year.

The collection methodology is relatively simple: "The current legislation would shift the collection from reservations to the manufacturing and wholesale level, a tactic that worked in other states." Now all that is missing is the political will; but a determined legislature could insist on this a a quid pro quo of any budget deal. Stay tuned.