State lawmakers might end clothing tax exemption

ALBANY - Searching for more money to close New York's $9.2-billion budget deficit, state officials are mulling an end to the tax exemption on clothing and shoe purchases below $110, sources said last night.

Gov. David A. Paterson and leaders of the legislature's Democratic majorities want to resume charging the state's 4 percent sales tax on the purchases, bringing in about $690 million a year. However, tax holidays likely would be offered around Labor Day for back-to-school shopping, and during Christmas, said the sources, who requested anonymity.

They added the tax resumption likely would be short-lived, lasting no more than a couple of years.

Paterson confirmed sales-tax changes were on the table but declined yesterday to provide details.

"We are reviewing them and frankly they don't sound bad," he told reporters after meeting privately with the leaders. "It's not formal yet . . ."

Paterson proposed scrapping the exemption in last year's budget, but yielded to intense public criticism.

State Senate chief John Sampson (D-Brooklyn) and Assembly Speaker Sheldon Silver (D-Manhattan) declined Wednesday to discuss the issue. Silver said, "We are talking about a variety of things that will get us to close the gap in this budget."

The tax exemption originated in 2000 but was suspended between June 1, 2003, and March 31, 2006.

Senate Minority Leader Dean Skelos (R-Rockville Centre) blasted the plan, saying his 30-member conference would oppose it. "With only a small part of the budget left to pass, the Democrats are looking for more opportunities to raise taxes, rather than cut spending."

Paterson and the leaders are rushing to meet the governor's June 28 deadline to complete this year's $136-billion budget. They have agreed to $95 billion in spending and $609.5 million in new taxes and other revenue. Of the $9.2 billion in red ink, $4.68 billion has been stanched through spending cuts and tax increases.

The budget is now 85 days late. Key sticking points are the Assembly's push to restore $419 million of Paterson's more than $1 billion in school aid cuts, his advocacy of more independence for SUNY and CUNY and the Senate's insistence on property tax relief.