Tuesday, August 31, 2010

Fed Up!

Just as we said yesterday, it's never over till it's over when it comes to enforcing the tax on Indian cigarettes. At the eleventh hour, a federal judge issued a stay-and will hold a hearing on Thursday. As the Buffalo News reports: "U.S. District Judge Richard J. Arcara gave a temporary reprieve this afternoon to Native American tribes trying to fight off the state's efforts to collect taxes on cigarette sales to non-Indians. In a brief ruling issued at 3:40 p.m., Arcara granted a temporary restraining order that directs the state not to enforce a tax-collection law, which is scheduled to take effect just after midnight. State officials are "TEMPORARILY ENJOINED from implementing, administering and enforcing" the new tax law, the judge said in a written ruling given to lawyers and Seneca Nation business people in a packed courtroom."

What a crock! This, in our view, should be a matter of settled law-especially after the Supreme Court has weighed in on the legality of this issue on the side of  NYS-but this is going to really cost the NY's beleaguered treasury; because every day that the tax remains unenforced will cost NY State tax payers over $2,739,000 a day

And this is something that the governor should have been aware of when he staggered the enforcement provision of the law to lag behind the July 1st tax increase. What that disparity did was to enable the tribes to build a robust legal war chest to attack the enforcement with-it was just plain dumb to give these scofflaws a lucrative Indian summer of love.
And this judge will simply exacerbate the tax collection problem by a series of endless dilatory meetings: "While the judge's order protects Native American cigarette sales from state taxation for a period of at least two weeks, the litigation is far from over. Arcara will meet with attorneys in the case again on Thursday. He will examine the issue more closely in the next few weeks, his ruling at least temporarily delays implementation of a law that could ignite hostile and dangerous protests on Seneca Nation reservations in Erie and Cattaraugus counties."
The state needs relief now-and strong measures do need to be taken since the tribes have not shot all of the arrows in their quivers: "State Police, the FBI and numerous other law enforcement agencies have been gearing up in recent days for protest actions that could block the State Thruway and impede railroad trains passing through the reservations.They are also investigating a July 5 incident in which someone tried to derail a passenger train with 354 people aboard in Irving. Many police officials believe the incident was directly tied to the dispute over cigarette taxes."
The governor needs  to make a  strong public statement in support of enforcement-and draw a line in the sand so that the tribes no not to mess with him. The scofflaws have won this round; but it is crucial that NY's tax payers when the next one.