Regs or Dregs?

The Governor's office has issued the draft regulations for collecting the Indian cigarette tax, and the outstanding question is whether this is a real step forward or just another stalling tactic? As Capitol Confidential reports: "Tax regulations that would result in collections associated with sales at Native American stores in New York are getting signed by Acting Tax Commissioner Jamie Woodward today, according to an official familiar with the plan. The regs, which Gov. David Paterson promised in addresses earlier this year, will require suppliers to Indian merchants to provide cigarettes with tax stamps, cutting off the supply of non-stamped products and theoretically leveling the playing field with off-reservation stores. Indian merchants can get unstamped products for sale to tribal members."

Theoretically is right. The draft regs are to be posted in the middle of next month and there's a 45 day comment period after that. Can anyone say rope-a-dope? It appears to us that Paterson, by delaying the regulations in this fashion-and announcing them at least two or three weeks before they actually get posted-is giving the cash rich Senecas a good heads up to gear up; and can a multi-million ad campaign be far behind?

We asked a real knowledgeable veteran senate staffer to take a look at the regs and comment on them. This is someone who had been intimately involved in the 1994 dust-up that led to the US Supreme Court ratifying the right of NY State to tax Indian cigarettes in the first place. And he told us that they are just about the same regs that were promulgated 16 years ago-so much for the need for a prolonged comment period.

The reality is that, given the state's budget crisis, Paterson could have issued emergency regulations and not initiated a long drawn out affair that will needlessly delay the cash influx that New York desperately needs. And the following from CC doesn't inspire us with confidence: "Paterson’s aides have maintained that negotiations with representatives of tribes will continue to resolve disputes involving taxation."

What is this, a hostage exchange? What do these Indian cigarette sellers have that we need to be negotiating about the enforcement of the law. It makes one suspect that this is more about electoral cash than much needed tax revenue. We're just saying.

We'll have more discussion of this in the days ahead, but we can foresee just how the governor's dilatory tactics can frustrate the process. Now's not the time to do any end zone dancing-and Tuesday's press conference for the newly formed coalition to collect the tax is much needed in order to continue to hold Paterson's feet to the fire.

Here's Crain's Insider's announcement (subsc. only) of the press event: "A new organization will be launched in Albany on Tuesday to pressure the state to collect taxes on cigarettes sold on Indian land to non-Indians. The Enforce the Law/Collect the Tax Coalition, featuring business, labor and civic groups, will push Gov. Paterson and the Legislature to deliver on the promise Paterson made in January. Nicholas & Lence Communications is aiding the effort. Collecting the taxes due could raise $1 billion annually. Supporters worry that Paterson won't follow through because his proposed budget includes no revenue from the tax."

With more taxes-like the one on soda-in the works, it behooves the legislature to continue to full court press the Indian collection. There's simply too much money being left on the table for any laissez faire attitude to be exhibited. Paterson needs to be forced into simply enforcing the law in an expeditious and not a cavalier manner.