There’s no such thing as a free lunch

A few weeks ago, we received a press release from New York State Assemblywoman Aileen Gunther announcing proudly that she and the rest of the Assembly had voted down a number of fees and taxes that had been proposed to help close New York State’s $3.2 billion budget gap. The list was a grab bag of taxes that targeted items from services like hair cuts and manicures to digital downloads.

In many ways, Gunther has done a laudable job as Sullivan County’s representative, so nothing we say here is intended as a general knock against her. But we believe she is way off base in saying that “Rejecting these proposals saved New York families more than $2.1 billion.”

The truth is that the budget gap has to be closed, and any measures taken—including a legislative package adopted last week, which still doesn’t add up to $3.2 billon—are going to come out of our pockets one way or another.

When the budget gap is closed by cuts in state spending, it means that there will be losses of jobs for local residents. Lower payments to local governments during a period when demands on social services are rising means counties have to raise taxes, cut jobs, or both. All this weakens the local economy, in turn putting private businesses and jobs in jeopardy. And Governor Paterson has said that, on top of last week’s legislative budget package, he will unilaterally have to reduce state payments to local governments and school districts to finish balancing the budget, meaning there will be more pain of this type to come. Gunther has said she opposes such cuts—but has not said what she would like to replace them.

So some way, some how, that money is still coming out of your pocket. The idea is not to avoid taxes and fees to “save New Yorkers money:” that’s not possible. The idea is to apportion the costs in the most sensible and least painful way. And it is not clear that, with regard to every item on the list, the New York State Assembly acted wisely.

We absolutely agree with Gunther that some of the items voted down were turkeys. The headline item was a mandate for all New York drivers to buy new license plates. This was a ridiculous idea, not least because few of us actually need new plates. If the state wants money, it might just as well charge drivers the price of a new plate and then not give them one. That would at least have the advantage of saving the manufacturing and mailing cost, further reducing the deficit.

But other ideas on the list looked reasonable. Of the rejected fees, the second biggest revenue item was a tax on non-diet soda, which would have reaped an estimated $404 million. Soda is something that is not only a luxury, in the sense that nobody needs it, but also contains huge quantities of corn syrup or sugar, both of which can and do make you sick. What better candidate can you think of to tax?

A tax on soda can be avoided just by not drinking it. A higher state income tax, a likely alternative to this type of fee or tax, would hit everybody without possibility of escape. Meanwhile, billions of dollars are spent every year on medical problems related to over consumption of sugar, like obesity, diabetes, high blood pressure, heart disease and stroke—and according to the American Heart Association, the majority of added sugar in the American diet comes from sugar-laden drinks.

Reducing the quantity of a major cause of illness in people’s diets and discouraging its consumption would reduce not only taxpayer costs for medical services like Medicaid and Medicare, but the personal medical costs of the people who stop drinking it. If you won’t accept this kind of tax, what on earth will you accept?

Even after last week’s actions, more work needs to be done to close New York State’s budget gap. Ways should be sought that minimize the pain and maximize the social benefit, but we all have to understand that the money has to come from somewhere. As legislators struggle to balance the budget, we’d like to suggest throwing the soda tax back in the hopper—as a number of prominent health professionals have suggested—for starters.

Also in this issue:

• Protect New York State’s drinking water

Dr. Punnybone

Cart Blanche