cigarettes

The Buffalo News reports this morning that Gov. David Paterson will meet and negotiate with the leaders of the Seneca Nation before any shipments of cigarettes to Seneca retailers are halted. Aaron Besecker reports:

During a rally Sunday just south of the Route 438 Thruway overpass, [Seneca President Barry E. Snyder Sr.] read a letter from Gov. David A. Paterson in which the governor indicated his desire to begin talks with the Indian nation about the dispute over tax collection on cigarettes sold by Native American merchants to non-Indians.

It sounds as if the governor is considering backing off from enforcing the law that he himself signed in December that requires wholesalers to show to the state tax department that they are not selling tax-free cigarettes to retailers. If they fail to comply, they could be charged with perjury. In the meantime, a justice of the state Supreme Court "issued a temporary restraining order ... that blocks the state from enforcing its policy."

Paterson spokesman Morgan Hook said he would not comment on a private conversation between the governor and Snyder, but he did say a negotiated compromise on the cigarette tax issue “is an avenue [Paterson] would like to take.”

“The governor sees it as a window of opportunity,” Hook said.

What exactly would Gov. Paterson negotiate? This seems to be a pretty cut and dry issue. Either the state enforces the law or the law is repealed. Can you see any compromise on this?

Others have tried before and failed to collect taxes on cigarettes sold by Indian retailers. Nevertheless, faced with a $15 million budget shortfall, Gov. David Paterson could not keep from trying to tap into the estimated $400 million that is lost annually by the state through the sale of tax-free cigarettes.

From the Buffalo News:

Gov. David A. Paterson this morning signed into law a new effort to begin collecting taxes on cigarettes sold by Indian retailers to non-Indians, a move certain to spark controversy and push-back from the booming tobacco trade on Seneca Nation reservations.

That article takes quite a comprehensive look at some of the changes that will be proposed by the governor to help chip away at the budget deficit, including increased gambling hours at racetrack casinos and a revamping of the state's Empire Zone program.

What do you think of the governor's proposals? Should he try and get the tax money from cigarette sales? Will he succeed? What are some other ideas he might try to implement to bring more money into the state?