(Albany, NY) On Tuesday, March 24, 2009, Governor Paterson announced that due to the current fiscal crisis, 8,900 employees would be laid off in the coming weeks. Paterson’s office placed blame on labor’s reluctance to give in to concessions and indicated that details would be forthcoming. In the wake of the largest cut to the state workforce in more than a decade, Assemblyman Ortiz again pushed forth with an innovative and comprehensive solution: Tax Junk Foods and Alcohol.
Initially labeled as a ‘Fat Tax’, the Assemblyman’s plan to add a small tax (between ¼% and 1%) onto the sale of high calorie low nutrient sugar sweetened beverages and junk foods (A2455) would raise an estimated $50 million in revenue annually. At the same time, the Assemblyman’s plan to add a ‘dime a drink’ tax on alcoholic beverages (A6738) has the potential to raise $538 million dollars annually for New York State.
In announcing the layoffs, the governor’s office is predicting that $481 million will be saved over two years.
“If the cost to save 8,900 jobs is $481 million over 2 years, adding the expected revenue of both the alcohol and ‘fat’ taxes together fills this gap,” said Ortiz.
Besides the short-term financial benefits that could be generated to stop the immediate job cuts and keep New Yorkers off ever-growing unemployment lines, both proposals have the potential to provide immense long-term savings. Studies show that an increase in alcohol taxes nationally would actually improve the probability a child will graduate from High School and College as well as improve overall Public Health. Curbing childhood obesity, the primary goal of the ‘fat’ tax, would help save some of the estimated $5 billion dollars New York State spends every year on obesity related health costs.
“When it comes down to the hard choices, many New Yorkers look for extra sources of income to ensure the bills can be paid. For the state, this may mean that we explore small excise charges that will add up across the board to generate meaningful revenue. The short and long term benefits of these bills are real and tangible; I have written to the governor urging him to pursue these alternatives,” said Ortiz.
According to the New York State Department of Labor, the unemployment rate in New York State was 7.6% in January 2009, up from 6.8% in December 2008 and up from 5.3% in January of 2008.