Friday, August 15, 2008

Texas Fold-Um?

Governor Paterson looks like he's going to do the same Indian tribal dance that his predecessors did with the tribes over the collection of cigarette tax revenues. As the NY Sun reports this morning: " Days before the New York Legislature will try to stem growing budget deficits, leaders of the Seneca Nation pressed Governor Paterson's office to veto a bill that would require collecting millions of dollars in taxes on cigarettes now sold tax-free by tribes. Nothing was resolved yesterday, spokesmen for the tribe and Mr. Paterson said."

Brother, here we go again! Will we have another gubernatorial failure of will-and at a time when Governor Paterson clams that our fiscal situation is reaching Depression levels? The Sun's recapitulation of this issue misses the mark: "Although Indians may sell goods to other Indians free of sales taxes, most Indian sales are to non-Indians. Tribes argue that treaties dating to the 19th century allow them to avoid state government sales taxes. But state officials going back to the 1980s have argued sales to non-Indians are taxable and the money should be collected."

The fact is that the tribes don't have a legal leg to stand on; and the US Supreme Court has denied their sovereignty claims on this issue. The only reason there's been no enforcement lies with the pusillanimous nature of our state's chief executives: their fear of a repeat of tribal violence that closed the Thruway in the Nineties. Not a very good reason, is it? Do we now have the terrorist veto in New York?

The Indian arguments here are tragically farcical : "We continue to ask New York state to honor its treaties," the chairman of the Seneca Nation's Legislative Council, Richard Nephew, said. He said the taxes would cut into sales, which in turn would hurt the tribe's employment of 5,000 people and other economic benefits it spins off in western New York. "The state still comes out ahead," Seneca Counsel Robert Odawi Porter said. "It just doesn't go into the Albany trough."

This does, of course, overlook one important fact. The so-called economic benefits are those that are siphoned off from the tax paying store owners-who have lost sales and employment to the scofflaws. The jobs will still be there if the taxes are collected; just not at non tax paying tribal retailers.

So let's collect the $400-$500 million in taxes so that the state doesn't have to increase the tax burden on its already overburdened citizens. The governor has put $1billion worth of cuts on the table. The collection of the cigarette tax revenue would be a welcome relief if Paterson can make the strong stand that is necessary.