Smoking Out the Guv

As Capitol Confidential reports, a number of state lawmakers showed up at the inaugural press conference of the Collect the Tax Coalition...: "Several senators from both sides of the aisle appeared at a press conference Tuesday afternoon to support the enforcement of tax collection on cigarettes sold over the internet and on Indian reservations. Senators Carl Kruger, D-Brooklyn, David Valesky, D-Syracuse, Jeff Klein, D-Bronx and Marty Golden, R-Brooklyn, each gave an abbreviated speech backing measures to enforce tax collection on all cigarettes sold in New York, an estimated $1 billion source of income for the cash strapped state. “We should be able to collect taxes that are rightfully due,” Kruger, the chairman of the Senate Finance Committee, said. “Today is a launch date. It’s very, very simple: tax before you cut.”

And yesterday, was also the launch day for the start of Kruger's subpoena process designed as a Barium enema for getting to the bottom of how much the state is actually losing from the policy of non-enforcement. As he said in his press release: "Senator Carl Kruger (D-Brooklyn), Chair of the Finance Committee, announced today that he will issue demand letters – including one to Gov. Paterson -- as the mandated seven-day pre-cursor to the issuance of subpoenas in the investigation of untaxed cigarettes coming into New York State. The letter to Paterson will demand that he direct his agencies to “fully comply and cooperate” with Sen. Kruger’s investigation into uncollected cigarette taxes. If the Governor fails to cooperate after seven days, he will be issued a subpoena for a personal appearance, Sen. Kruger noted. “The Governor has been a willing and active partner in a longstanding travesty that has hurt legitimate businesses and robbed billions from our state at a time when essential services are being threatened with deep cuts,” Sen. Kruger said."

Kruger is supported in this effort by Democratic conference leader John Sampson: “The State’s failure to collect cigarette taxes means critical services will be cut back and the taxpayers of New York will be forced to suffer while Native American tobacco retailers flout the laws of this state. It is critical that we immediately begin to collect these rightful taxes to begin to close the growing deficit, said Senate Majority Conference Leader John Sampson”

At the press conference Republican Senator Marty Golden make this stark point about the disappearing cigarettes: "Golden said the number of cartons sold in New York dropped from 90 million in 2001 to 40 million in 2009, but the bulk of that difference resulted from cigarette sales being driven underground to the internet and Indian reservations. Golden said that New York would have accumulated $16 billion in tax revenue if cigarettes sold online and on reservations were taxed between 2001 to 2009."

Regardless of how much exactly the state is really losing for the policy of forbearance-and the number is very big no matter what it actually turns out to be-the issue for Senators Klein and Valesky is the upholding of the law: "This is frustrating,” Klein said. “I can’t stand here and say that there are anymore laws we’re going to introduce or laws that we can pass.” Valesky suggested the problem could be solved with a basic civics lesson. “Legislatures write the laws and executives enforce the laws. Seems pretty simple, should be pretty simple,” he said. “I wonder how school teachers would explain this little exercise here today.”

So the process of uncovering the 16 year cover up has begun-and will continue even if the governor, who is seemingly becoming somewhat of an expert on covering up, takes his leave for yet another unelected replacement. If Kruger has his way, the strategy of rope-a-dope will end; and the implicit partnership of government with a criminal enterprise will cease to exist. We'll give the senator the last word: "“I fear that the actions I am addressing constitute some kind of a ‘secret partnership’ to effectively stall and delay tax collection. With every day that goes by, even using the weak and ‘fuzzy math’ used by your Tax Department, triple-digit millions go flying out the proverbial window,” Sen. Kruger said."