Paterson says he will seek higher tobacco taxes

ALBANY - After the Assembly passed $18.5 billion in budget legislation Friday, Gov. David A. Paterson's administration announced plans to include $440 million in tobacco taxes in the emergency spending bills needed to keep state government running.

Robert Megna, Paterson's budget director, said the bills, due to be voted on Monday, call for raising the cigarette tax by $1.60 per pack to $4.35, the nation's highest. In January, Paterson proposed a $1-per-pack increase. The new cigarette tax would begin July 1, Megna said.

He added the emergency bills also would increase levies on cigars, chewing tobacco and similar products, from 46 percent of the wholesale price to 75 percent. This hike takes effect Aug. 1.

The legislature's Democratic majorities appeared Friday to embrace Paterson's proposals, and Megna predicted the bills would pass Monday because to do otherwise would close state government for the first time in modern history.

In addition to tax hikes, the bills attempt for the umpteenth time to collect taxes on cigarettes sold by Indians to non-Indians, starting Sept. 1. Megna estimated $150 million would be collected on such sales and another $290 million from higher tobacco taxes.

"We want people to stop using them," he said, referring to cigarettes and other tobacco products. "The added benefit is we will derive increased revenue to help close the deficit."

A government shutdown was only narrowly avoided earlier in the week in the Senate, when three Republicans joined most of the Democratic majority in approving another set of emergency bills. At the time, the GOP senators vowed to oppose tax increases.

Austin Shafran, a spokesman for Senate Democrats, indicated the votes were there to pass the next emergency bills. "Our members will review the specific details of the bill and we fully expect to keep government running as we have done with each of the previous emergency extenders," he said.

A spokesman for Assembly Speaker Sheldon Silver (D-Manhattan) said the speaker has backed increasing tobacco levies in general as well as collecting tax on Indian cigarette sales.

But Senate Minority Leader Dean Skelos of Rockville Centre said, "Senate Republicans will not vote for any budget that includes new taxes, fees or borrowing."

J.C. Seneca, a tribal councilor with the Seneca Indian Nation, said Paterson's proposal "sets back Indian relations decades." Seneca added, "We will do whatever it takes to protect ourselves."

Meanwhile, the Senate didn't follow the Assembly in voting on budget bills Friday because four Democrats were absent and the 30 Republicans were expected to vote no.

The Assembly approved spending on roads, prisons and open space purchases. It also replaced the Empire Zones business development program with the smaller Excelsior Jobs Program.