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ALBANY — As revenue comes in short of projections, Gov. David Paterson revised his budget proposal Tuesday to include a higher tax on the payrolls of New York City businesses and higher fees on selling wine in grocery stores, which he wants legalized.
Paterson is also counting on $1.06 billion proposed in President Barack Obama's federal budget. The federal fiscal relief is in Obama's budget, as well as a House bill, and legislation sponsored by U.S. Senate Majority Leader Harry Reid.
The increased franchise fee for selling wine in grocery stores would affect businesses grossing more than $1 million. Paterson predicts it would bring in $162 million during the 2010-11 fiscal year.
The new fee structure for wine in grocery stores would bring in $300 million over the next two years, Paterson said. That money would be used to cover Medicaid costs and prevent cuts to health care.
He also wants to boost the payroll tax in New York City to 0.54 percent, up from 0.34 percent. The revenue would go to the Metropolitan Transportation Authority. For every $100 spent on payroll, businesses in New York City would have to pay 54 cents. Businesses outside the city would have to pay 17 cents for every $100 of payroll.
Paterson said Tuesday that so-called mobility tax would generate $230 million for the transit agency.
The proposal would cut the tax rate for metropolitan-area businesses outside of the city to 0.17 percent, so New York City businesses would contribute 88 percent of all mobility tax revenues.
"We oppose increasing this tax on jobs and payrolls within New York City," said Kenneth Adams, president and CEO of The Business Council of New York State Inc. "Increasing the MTA payroll tax will damage the city's economic recovery and drive jobs from the city and the state."
The self-employed and partners with income below $100,000 would be exempt from the payroll tax, up from the current threshold of $10,000. That would exempt an additional 400,000 small business owners.
"These proposals push out the state's problems to another day," Comptroller Thomas DiNapoli said in a statement. "These are cosmetic fixes. We're a long way from the reforms New York needs."
Paterson announced last week that he's identified an additional $750 million deficit through the end of 2010-11. He attributes that largely to higher than expected Medicaid costs and less revenue than expected from Wall Street bonuses.
He projects that the state has an $8.2 billion deficit for the upcoming fiscal year.
Paterson said he's identified $1.2 billion in new resources since his first budget proposal in January, which would leave a $485 million reserve for any additional shortfalls.
Paterson's plan would also include other small changes, including a $5 million cut to local government efficiency grants.
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