NEW YORK STATE'S BUDGET WOES SOLVED WITH A SIN TAX

(April 1, 2010) No, this is not an April Fool's column.

It is as serious as I usually am when I talk about New York State
government.

I've been watching the jokers in Albany for so long that perhaps I'm
beginning to think like them.

It's like this: the Dems in control -- my party -- have started
focusing on a series of "revenuers" to fix what's broken in the budget.

Now we all know what's broken. The folks in Albany spend lots more
than they take in -- it's that simple. All they have to do is stop
spending what they don't have and bingo: a balanced budget.

But no, they have all these special interests to take care of, so
they can't cut spending by too much; they come up with revenue
enhancements, surcharges, tolls, fees -- and they'll even, very
occasionally, call it taxes -- or some new fangled concept.

You know, "a rose by any other name...?" Well, this is "a tax by any
other name..."

But what exactly is Albany's latest approach to revenue enhancements
- -- new sources of funding (taxes)?

Government Taxes Sin

Well, they have bollixed up the Aqueduct Racino -- a project they
have been working on for almost a decade. After announcing in 2002
that revenue from video lottery terminals would help solve the
State's revenue problem, we're still waiting on the $300 million down
when the project is signed and about $1 million a day when it is
operational. Only, they can't pull the trigger, twice selecting
bidders who couldn't pass the test -- financial or character.

When it is finally a done deal, and the $300 mil banked, and another
$1 mil per day in the pipeline, we can all sleep better knowing that
legal gambling is helping the folks in Albany to pay the bills.

If gambling weren't enough, our accidental governor has decided that
selling wine in supermarkets will yield huge fees, increase wine
consumption and net the State a much larger share of the alcohol tax.
If the lobbyists don't stop him, between the franchise tax and
increased sale, that's $93 million extra from wine -- I'll drink to
that.

Let's not forget that the State Senate Dems want to legalize medical
marijuana, bringing $15 million in licensing fees, they also want to
refinance tobacco bonds for another $300 million -- and there is also
a plan to collect tax on cigarettes sold by Native Americans, which
could net the State another $1 billion.

It appears that the folks in Albany have discovered the answer to
their inept spending control is the magical "sin tax." Just tax
gambling, booze, drugs and everything else that makes you feel good.

Me, I was raised in a different New York City.

Gambling was illegal -- absolutely. I remember before the New York
State Lottery and "Howie the Horse" brought us OTB the only way to
gamble was with the mob: numbers, bookies or a Nathan-Detroit-style
floating crap game. New York didn't allow gambling.

We also frowned on booze; and marijuana or drugs of any sort were
dealt with the harshest set of laws known to man.

But that was then and this is now. The State needs money. So let them
do it if you can tax it.

Don't get me wrong, I'm not railing against the sin or the tax. I
just know that in the New York society that existed when I was a kid
sin was discouraged or illegal; in the one we will live in tomorrow,
sin will be encouraged and taxed.

The Real Budget Solution

The solution to the State's budget problem: keep encouraging sin, and
tax it like crazy.

Why stop at medical marijuana? You can't even tax it if it's for
medicinal purposes. We know you can get any drug you want at the
right club, school yard or street corner. Let's license, regulate and
tax it, taking it away from the underworld that makes all the profit.

Open State-licensed "drug" stores -- or give the franchise to CVS.
Perhaps liquor stores will want to enter the game and provide more
franchise fees -- and maybe supermarkets, too. Hell, competition will
bring the price down and the monster tax on the stuff won't even be
felt by the consumer.

Let's legalize all gambling; bring in the Indians or Steve Wynn and
collect huge licensing fees and tax them. It's not so complicated. A
Casino in Arverne, slot machines in the supermarket -- next to the
wine -- online sports betting and a numbers game licensed out of
every bodega.

Why stop there? Legalize, license and tax prostitution. Require
health registrations and regular testing for hookers -- the City is
already giving away free condoms wrapped in a design by a Queens
artist. The licensing and registration would help address the illegal
sex trade and take another bite out of unsanctioned street activity.

Picture a new big box store where once-questionable activities are
now licensed, encouraged and taxed by New York State, with wine,
drugs, condoms and a slot machine flanked by hookers at the checkout
counter. Or shop local, and rebuild a troubled Main Street. The
neighborhood liquor store put in jeopardy by the new Paterson Wine
Sex Slot Drug Store could remove some shelves, put in a card table
and a bed in the backroom. As long as they follow the rules and pay
their franchise fee and taxes they could once again afford health
insurance and their kid's college tuition.

Okay, it all sounds a bit flippant, you're thinking. But wouldn't it
hit organized crime in the pocket book -- where it really hurts?
Wouldn't it raise gazillions of dollars in new tax revenue for our
State? It would balance the budget without resorting to those phony
one-timers or hiding endless debt in quasi-public agencies, make
prostitution safer, make drugs less deadly and allow us to view our
society as it really is.

But most of all, it may enable the nation's most dysfunctional State
Legislature to continue to spend on member items, family members,
junkets, perks, special interest groups and waste -- and for the
first time in our lifetime, be able to pay the bill.

Happy April 1.