January 9, 2002

Washington, D.C.-The Small Business Survival Committee (SBSC) today voiced strong opposition to Governor Pataki's proposal for a big tobacco tax hike.

"It's crazy for the Governor to proposing any kind of a tax increase during a recession.  It's a sure recipe for killing jobs and small businesses," said SBSC President Darrell McKigney.  "New York already imposes the second highest state cigarette tax in the nation.  With an increase of 39 cents per pack being considered, New York's total state levy would skyrocket to $1.50 per pack.  That not only would be bad news for consumers, but for many businesses as well."

SBSC chief economist Raymond J. Keating observed: "New York's primary budget problem is too much spending, not too little taxes. Going unmentioned by Governor George Pataki, as well as Democrats and Republicans in the state legislature, is the fact that state government spending has gone through the roof in recent years, with annual spending increases registering far in excess of the rate of inflation. During Pataki's time as governor, the total state budget has risen by about 30%.  Besides, according to news reports, this tax hike would not actually go toward reducing the state's deficit.  Instead, it would be funneled into health care programs and pay raises for health care workers."

Keating added: "Unfortunately, Pataki did not lay out a specific plan in his state of the state address for cutting back the size of state government.  But he did offer a laundry list of programs he either wants to create, protect, or expand, including hapless public works projects, expanded corporate welfare, technology programs, and more education spending."

Keating concluded: "In the face of looming budget deficits, to his credit, Governor Pataki promised not to renege on scheduled tax cuts that are in the pipeline.  He proclaimed in his state of the state: 'Tax cuts will go forward.  They must go forward, because we know that tax cuts create jobs.'  That's true.  The governor also should know that tax increases destroy jobs.  And his proposed tobacco tax hike will hurt consumers, feed bloated government, damage small businesses, and destroy jobs."

SBSC is a nonpartisan, nonprofit small business advocacy group headquarter in Washington, D.C., with more than 70,000 members across the nation.  For more information, contact SBSC at 202-785-0238, or visit SBSC's website at www.sbsc.org.