Gov. David A. Paterson on Tuesday to threaten ... the prospect of billions of dollars in tax hikes on residents to help balance the moribund budget.

Paterson is also planning to cut more than 8,000 jobs from the 141,000 in the executive branch.

So is New York going to test just how high taxes can go before it completely kills the economy?

Lorie Longhany of LeRoy submitted this photo along with the following information:

Left to right: Genesee County chair Lorie Longhany; Wyoming County chair Hank Bush; Livingston County chair Phil Jones; Governor David Paterson; Orleans County chair Jeanne Crane.

Wednesday night after his town hall meeting in Rochester, Governor Paterson had dinner with the four GLOW Democratic chairs, as well as the chairperson from Yates County. The Governor spent two hours discussing local issues over dinner, along with posing for some pictures.

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 Either the state enforces the law or the law is repealed.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?

From Gillibrand's Web site:

In her first term in office, Congresswoman Gillibrand established herself as an independent leader in Congress. She was the lead sponsor of legislation that would implement the bipartisan 9/11 Commission Recommendations, which will help protect our borders and keep America safe. She has been an advocate for decreased federal spending, and introduced legislation that would require the federal government – just as all New York families do - to balance their budget every year. Finally, she has made tax cuts for Upstate and North Country families, one of her highest priorities. She has authored legislation that would double the tax credit for child care expenses and make up to $10,000 in college tuition tax deductible.

Precious reports that Gillibrand was getting the push from both Democrats and Republicans among her constituency, as well as from Sen. Chuck Schumer.

Gillibrand is a member of the conservative Blue Dog coalition in the House. She is known as “Little Hillary” — a nickname conferred by critics who claim she fancies herself the heir to Clinton’s job.

In recent days, gun-control advocates have come out against her because of her opposition to tougher gun laws.

Gillibrand, who also opposed the $700 million bailout of the financial industry, comes from a politically connected Albany family. Her father, Douglas Rutnick, was a lobbyist.

As for specific school districts within the county, here's the breakdown (based on proposed aid levels for the 2009-10 school year as compared with the current 2008-09 year):

• Alexander: A loss of $541,112, or 5.78 percent.

• Batavia: A loss of $637,011, or 3.14 percent.

• Byron-Bergen: A loss of $338,474, or 3.37 percent.

• Elba: A loss of $160,084, or 3.06 percent.

• Le Roy: A loss of $586,993, or 5.64 percent.

• Oakfield-Alabama: A loss of $372,623, or 3.57 percent.

• Pavilion: A loss of $163,353, or 1.88 percent.

• Pembroke: A loss of $537,260, or 5.01 percent.

Meanwhile, Sen. Chuck Schumer has teamed up with Paterson to seek federal block grants to help offset the cuts to school aid. Nothing specific is yet worked out on that. From Schumer's Web site:

There are various approaches that Congress can use to deliver these critical funds to students and schools. U.S. Senate and House Leadership are consulting with the President's team to determine the best, most effective way to provide schools with the targeted resources necessary to maintain jobs and academic programs. Congress is considering using existing federal education funding formulas, such as the one used for Title I, No Child Left Behind funding, to determine the amount each state will receive in block grants. Schumer said it is essential that the block grants are distributed in a way that gives states and districts the flexibility and tools they need to keep serving our children.

What do you think? Is shifting the burden from the state to the Fed to cover these deficits the best move? No matter where the "billions" Schumer quotes so frequently with such bravado come from, don't they, in the end, come from our pockets. But what other choice do we have? Should the schools suck it up and try to face the cuts? How can they?

He includes all the facts from the governor's perspective, but passes over one lone skeptical voice deep in the article.  There is little focus on the propriety of New York engaging in social engineering, nor the degree to which this plan is going to create new bureaucracies and hence new expenses, whether there is any evidence such a plan will work, nor how the plan will impact businesses and create new costs that will be passed along to all consumers.

The most far-reaching of the proposals is an 18 percent sales tax on sugar-sweetened beverages such as soda. Juices from fruit such as oranges and grapes are excluded from the proposed tax.

In the past 40 years New York residents have increased their consumption of pop from an average of five 12-ounce cans or bottles per week to 11 per week. Research has shown that consumption of non-diet soft drinks is one of the primary factors that increases the risk of obesity in children and adults.

"No question about the link. We have a core fact in front of us," Daines said.

Not so fast. There is a question. A big fat question.

To blame all low-income obesity on soda pop alone is myopic. Low-income diets tend to be heavy in empty carbohydrates of all kinds, not just sugar. Children living in food insecure homes consume less healthy food. One reason there is such an abundance of empty-carb foods can be traced to farm subsidies for corn, but even that connection is a rather simplistic view of the obesity problem among poorer children.

There is also the question of proper exercise.  In too many homes, children are allowed to watch TV or play video games rather than being required to run around outside.

These are largely parental issues, not government issues.

If the government wanted to do something to help, they would restructure aid programs to make it easier to buy healthier food.  Given a choice, most parents would pick more meats, fruits and vegetables. But right now these options are beyond their budgets. 

Driving up the costs of the high-carb foods isn't going to help them afford the good foods.

The article says, "You raise prices. You provide alternatives."  But what are those alternatives. How are they paid for and provided?  If the alternatives are paid for by the tax, how does the state ensure sufficient revenue for those alternatives once consumption of the taxed items goes down?

Will taxed drinks receive some sort of stamp like alcohol and cigarettes?  If so, aren't we just creating yet another environment for potential illegal black market activities?

And one issue about the proposed tax I've not seen discussed anywhere is the impact on business: Who will levy the tax? Will retail outlets be burdened with the the expense of tracking and tallying the tax, which could include the expense of reprogramming cash registers?  And if the tax is imposed at the wholesale level, won't it just get passed along to all consumers of soft drinks and other beverages from those particular wholesalers?

What about vending machines? Will vendors be required to have two prices on drinks in their machines -- one for taxed items, and one for non-taxed? Or will us diet drinkers just pay more? Who pays for the expense of reprogramming machines or replacing machines that aren't capable of handling tiered prices on soft drinks?

Per usual, any time the government starts interfering in private lives and private enterprise, there are as many if not more problems created than solved.

Here's an appropriate and timely video from Reason Magazine.

Rochester's Democrat & Chronicle picked up this quote: "We will sacrifice what we want today in order to achieve what we need tomorrow," he told a joint session of the state Legislature. "We will make sacrifices, but they must be shared sacrifices."

Yesterday evening, Democrats from Genesee, Livingston, Orleans and Wyoming counties issued a joint statement, summing up their thoughts and reflections following the address.

As we enter an era of uncertainty, Governor Paterson calls on all of us to work for the survival of our State with hope, courage and bi-partisan action. Speaking of "one state one future," the Governor recognized the need to revitalize every part of New York, including our region, by focusing on the need to strengthen our health care system, combat childhood obesity, make college affordable for all, improve local government efficiency, rebuild infrastructure, develop 21st century energy efficiency, create bio-tech jobs, increase tourism, and form a consortium on hybrid electric battery manufacturing. This speech was a call to the legislature and, ultimately, the people across the State, to recognize that these are very tough times, our problems need to be solved together, and every New Yorker needs to tighten his or her belt, confident in the hope of a better tomorrow.

We hope to hear more of your reactions to the State of the State throughout the day today.

Of those meetings that have so far been scheduled, three will be held within a short distance of Batavia: one in Buffalo on February 18, one in Rochester on February 11 and another in Geneseo on February 12. Others will likely be held in Watertown and Binghamton.

From the article:

Paterson has moved away from Spitzer's plan to split up some state duties, particularly economic development, into upstate and downstate branches. Paterson has argued that New York is one state with a united purpose.

Andrew Rudnick, president of the Buffalo Niagara Partnership, said an upstate address isn't necessary so long as the governor gives the region the attention it needs.

If the symbolism of an upstate speech, "isn't followed up by definitive policy and asset allocation, what much difference does it make?" he said.

Most people would likely agree that the most pressing issue now facing the state is the budget crisis. A few weeks ago, Paterson released his budget proposal that caused quite a stir. We've put together a poll with a few topics that might come up when the governor visits upstate. Pick whichever you most want to hear about. I figure that the budget proposal will likely be a major part of the State of the State this Wednesday, so try to think what's most important to upstate other than that.