NY Feels The Economic Pinch Thus Pinching You

NY gov proposes tax on drinks, downloaded music

ALBANY, N.Y. – Gov. David Paterson's first state budget threatens to affect just about every New Yorker. Even those online.

Paterson proposed Tuesday a 2009-10 budget that would increase spending by 1.1 percent, or $1.3 billion, to create a $121.1 billion spending plan.

Much of the growth is revenue from 88 new or higher fees and will hit New Yorkers in many areas, from downloading music to sipping drinks to fishing.

One of the proposed hikes is a so-called "iPod tax," which would tax the sale of downloaded music and other "digitally delivered entertainment services" by 4 percent.

There also would be higher taxes on gas, taxi rides, cable and satellite TV service, cigars, beer, movie and sports tickets, and health spa visits, to name a few items.

Paterson seems to be fighting both obesity and budget deficits with a proposal for an 18 percent tax on soda and other sugary drinks containing less than 70 percent real fruit juice.

"People don't really realize the amount of calories they're ingesting through liquids," said Joe Baker acting deputy secretary for Health and Human Services to the governor. "They say, 'Oh, it's just a drink.'"

The idea is to discourage consumption of high-caloric beverages — health officials estimate a 5 percent drop — and to raise $404 million in fiscal year 2009-2010 toward the state's multibillion dollar budget gap. Paterson said the proposal would raise $539 million in 2010-2011.

The American Beverage Association opposes the tax, saying it would most harm the middle class. The group also argued that it doesn't make sense to single out a single food product as the cause for obesity.

"There is no science or logic that justifies it," the association's statement said. "Rather, we need to focus on promoting balanced eating habits and more physical activity. Until we get our kids exercising more the scales will be tipped against our next generation."

According to state officials, almost one in four New Yorkers under age 18 are obese, and at higher risk for dangerous, expensive illnesses like diabetes and heart disease.