Guest Op-Ed: What New York State could do with an additional $2.64 billion

Recently, New York State enacted its fourth on-time budget in a row. Recent budgets have held overall state spending to an under two percent increase; cut 30 different taxes, saving us more than $3.3 billion; and reduced middle class tax rates to the lowest they have been in 60 years.

By working in a bipartisan manner, the state legislature and the governor have made a real difference in the way government thinks and operates. However, more still needs to be done. Now, is the time to ensure taxpayers know that the state is doing all it can to get the revenue to which it is entitled.

New York State lost $2.64 billion in revenue last year as a result of bootleg cigarettes coming in from out of state. That money could have been used to help fund pre-K, fix roads and bridges, or further reduce taxes for residents. Instead, these dollars are aiding illegal activities.

A recent study by the Tax Foundation noted that almost 57 percent of cigarettes smoked in New York were brought into the state illegally. This is the highest level in the country. Other studies have found that about 62 percent of the cigarettes were untaxed. Some groups have estimated in New York City close to 80 percent of the cigarettes smoked are untaxed.

Last year, there were 25 million cartons of state-stamped cigarettes, and seven million cartons stamped city/state. If the 32 million cartons represent 57 percent of the total cigarettes consumed, then the true total would be 74.4 million cartons. That means 44.4 million cartons are untaxed. The average carton in New York produces about $60 in excise, sales and other taxes.

New York taxpayers lost $2.64 billion.

By having high tax rates on cigarettes and by putting a low priority on enforcement, New York is not doing all it can do to combat illegal cigarettes and maximizing revenue.

We could fix this hole in our budget by working together. We will need help from the cigarette manufacturers to ensure that cigarettes produced for a market are being sold in that market.

For example boxes of cigarettes sold in Virginia should not be sold in New York. By ensuring that cigarettes produced for an area are sold there, we will encourage the purchase of a taxed product.

I recommend having the state establish an enforcement fund. All confiscated cigarettes should be resold with the revenue going to this fund. Any confiscated money should go into the fund as well.

We know that high taxes and weak enforcement only hurts the taxpayer. By taking these simple, commonsense actions, New York could be turning a fiscal drain into a financial gain.

State Senator Marty Golden represents the 22^nd S.D.