Sales tax fight a slice of real life
For at least two more weeks, Albany's biggest drama will focus on a crisis budget with billions of dollars' worth of cutbacks on the line.
Judge only by the headlines, however, and you might not guess that state taxes and spending generate many, many smaller controversies, together worth a lot of public and private money, year-round. These issues, varying in scope, tend to get resolved slowly, in agencies, courts and Capitol offices, outside the bandwidth of civic attention.
Consider the theatrics over a multimillion-dollar state tax issue that began in Suffolk and has lasted through many seasons.
Last October, without fanfare, a state Appellate Division panel decided a lawsuit brought nearly six years ago by Island Waste Services Ltd., operator of a Holtsville trash transfer station that has handled municipal waste and construction debris.
Essentially, the court upheld the state's claim that the company could be charged some $2.5 million in sales tax on its payments to other firms' truckers for the period from 1997 to 2005. The dispute involved whether the state could impose sales tax given the nature of the firm's business.
The court decision notes: "Seventeen other taxpayers with similar assessments agreed by stipulation to be bound by the outcome of this proceeding." That suggests the case may be worth tens of millions of dollars to the state.
A big twist in the story came in 2005, when Gov. George Pataki signed a law specifically exempting transfer stations from paying sales tax on the removal of waste materials from their premises. That gave the firms something they wanted. But the fight is now over taxes assessed by the state for the years leading up to 2005, when the state considered the tax in effect.
Fast forward to Jan. 25, 2011. In a letter filed with regulators, a major national industry trade group let it be known it was hiring the Albany-based lobbyist Richard L. Ostroff for 12 months for a total $120,000. "The services relate to sales tax relief and other related issues before the executive and legislative branches of the New York State government," says the letter signed by Bruce Parker, president and chief executive of the Environmental Industry Associations.
"When they changed the law [in 2005], we were hoping a lot of these matters would just wind down," said Steve Changaris, the organization's manager for the Northeast region.
Instead, state officials pushed for payment and the dispute lives on.
Ostroff, a seasoned Albany lobbyist, and his firm represent a wide range of industrial and nonprofit clients. Ostroff came out of government. Under Gov. Mario Cuomo, during the early 1990s, he served as legislative affairs director, the liaison between the governor's office and the legislature.
Ostroff, who was unavailable for comment, has been a contributor to Gov. Andrew M. Cuomo. He and associates in his firm also have contributed to many other major players over the years. None of this, of course, assures or even hints of his chances of success.
The point here is merely one of perspective. Governors and lawmakers this season talk dramatically of fast action toward broad cuts, job development, big sacrifices and tax restraint. But as this slice of life shows, the everyday intrigue of most public issues remains incremental, murky -- and incredibly unsexy.
