Kudos to Liz Benjamin for linking to the NYACS sponsored study on the Indian cigarette tax revenue that the state is leaving uncollected-over $1billion! As the report underscores: "New tax revenues (including sales tax receipts) from the taxation of Native-American retail sales of cigarettes to non-tribal customers would be in the vicinity of $1billion. These new revenue sources would help close the projected budget deficit of $13.7 billion in the upcoming fiscal year."
Incredibly, the governor has not only excluded any of these revenues from his budget projections, but-adding insult to injury-is looking to raise the cigarette licensing fees by 900% for those retailers who are charging and collecting the levies. This insult was featured yesterday in a NY1 story that pointed out: "Governor Paterson's proposal to raise the $100 registration fee store owners pay for the right to sell tobacco products is drawing the ire of small business owners and advocates."
What's the state's windfall here? A measly $18 million; but for store owners, it's a real fiscal pain at a time when stores are closing their doors in record numbers-and that goes for the city's newsstand owners as well. As Rob Bookman, counsel to the Newsstand Operators Association told the station: "It would hurt the little guy the most...They can't stop selling it, they must have the product. They'd lose too many customers who buy other products if they didn't have that. They wouldn't come into the store. So it's truly taking $900 out of the pockets of the small business owners of the city of New York at a time when they could least afford it."
And, as we told NY1, the plan would have a zero impact on public health-simply driving smokers further into the illegal black market that is already bleeding tax dollars away from the state's treasury; just another reason why the governor's approval ratings are sinking faster than AIG stock. Paterson needs to go on the warpath against the black market, and not small store owners struggling to stay afloat in these rough economic times.