Wednesday, January 07, 2009


According to Liz B, the governor has some serious allies for the implementation of his fat tax: "While they may vehemently oppose Gov. David Paterson's proposed health care budget cuts, 1199-SEIU and the Greater New York Hospital Association are supportive of his so-called "fat tax" on sugary drinks and his plan to boost existing taxes on some alcoholic beverages. In fact, the health care workers union and its hospital partners would like to see Paterson go even further by opting for an excise tax of one cent per ounce rather than a sales tax on sugar-sweetened drinks and applying the proposed increase of taxes on beer and wine to all kinds of booze."

But the coalition in question by going even further, sets up an almost confiscatory tax environment. As Capitol Confidential tells us: "But instead of a sales tax, the group is looking to impose an excise tax that would tax by weight - a penny-per-ounce. So that Double Gulp, which is a whopping 64 ounces (2 liters), would see a 64-cent tax. (In case you were wondering, a super big gulp is 44 ounces, a big gulp is 32, and a gulp is 20 - yes, I looked it up.)"

So, let's get this straight. In order to fund an already bloated-and underutilized-hospital system, these folks want to further tax New Yorkers, and damage city and state business in the process. And the system is not only bloated, it's also rife with fraud. As the NY Post reported yesterday: "Two hospital workers helped uncover an alleged Medicaid drug-treatment scam that prosecutors say has cheated taxpayers out of $50 million, The Post has learned."

And the paper followed up with the following editorial that is extremely relevant to this discussion: "With the state facing whopping budget shortfalls, cracking down on Medicaid fraud seems more vital than ever. But closing underused facilities - eliminating their "need" to engage in fraud and sleazy "patient"-recruitment - should also be at the top of the to-do list."

Which is exactly what the SEIU and GNYHA want to prevent-with millions of additional tax payers dollars being used to cover up this glaring problem. Here's the statement (via Liz) from the tax gougers: "These soda and alcohol taxes can be important elements of a larger, comprehensive effort to ensure shared sacrifice in closing this budget deficit. With a "5-5-5" plan, we can reduce New York's $15 billion budget deficit via $5 billion in increased federal funding, $5 billion in various state taxes, and $5 billion in other State actions, including equitable spending cuts spread across all sectors," the union and the hospital association said in a joint statement issued earlier today"

The reality is that Medicaid spending-both actual and fraudulent-is one of the big reasons NYS is in such a fiscal dilemma. We need to focus heavily on this sector; and not engage in diversionary, "...spending cuts spread across all sectors..." that camouflage where are real budget problems lie.