Poughkeepsie Journal: Budget plan squeezes cash out of soda, cigarettes, speeders

(January 20, 2010)

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January 20, 2010

Budget plan squeezes cash out of soda, cigarettes, speeders

Joseph Spector
Journal Albany bureau

ALBANY — Smokers would have to pay $1 more in taxes on a pack of cigarettes, soda drinkers would have to pay a penny more per ounce on a can of soda, and gamblers would get more time to play Quick Draw and video-lottery terminals under Gov. David Paterson's budget plan, announced Tuesday.

And watch out on state highways: The governor's proposal would install cameras to nab speeders at 40 work zones and 10 other locations.

With the state facing a $7.4 billion deficit in the 2010-11 fiscal year, Paterson is proposing $1 billion in new taxes and fees. The proposal is much lower than the $8 billion in new taxes and fees in the current year's budget. But if approved, the new taxes would still be a hit to many New Yorkers.

Some lawmakers and groups were quick to knock new charges. "New York should be reducing its tax burden and growing its economy, not making our worst-in-the-nation tax burden even more onerous," said Mike Elmendorf, state director of National Federation of Independent Business.

The cigarette tax would increase the current $2.75-per-pack tax by $1, giving New York the highest tax on cigarettes in the country. The state estimates it would bring in $218 million a year. Advocates said the tax — and the one on sodas — would make the state healthier.

"Today's budget announcement shows that New York can once again become the national public health leader in tobacco control," said Scott Santarella, president of the American Lung Association in New York.

The excise tax on sugary drinks would mean about a one penny per ounce tax on sodas and other sugary drinks. So the $1 cost of a 16-oz. bottle of soda would increase by about 16 cents, budget officials said. Dietary aids, infant formula and milk would be exempt. The proposal, which fizzled last year, would bring in about $465 million a year. PepsiCo Inc., based in Purchase, Westchester County, and other bottlers have fought it.

"A tax of this magnitude will result in major job losses in the beverage industry. It will not reduce obesity. It is not intelligent public policy," said Kevin Flood, an executive with Coca-Cola Enterprises Inc. in New York.