Business

Extra NY tax revenue all smoke and furors

The Rolling Stones said it best: “You can’t always get what you want.”

But it seems New York state never gets what it wants. That’s especially true when it comes to increasing tax revenue.

Case in point: cigarette taxes.

The state’s tax collectors were recently calling around to convenience-store owners, wondering what was up. The $130 million in extra tax that Albany was expecting from a change in the law about cigarette sales on Indian reservations wasn’t happening.

A memo sent to members of the New York Association of Convenience Stores from the group’s president, Jim Calvin — a copy of which I have on my desk — said, “I got a call from Gov. Cuomo’s budget office yesterday. In examining cigarette tax receipts so far this fiscal year (April 1 to March 31) it looks like they will fall considerably short of their projection in new revenues. . . .”

The state had hoped to get the extra dough by enforcing a new law that made it illegal for licensed cigarette wholesalers in the state to sell untaxed name-brand cigarettes like Newport and Marlboro to Indian reservations.

The reservation store would sell the cigarettes to non-Indian customers who were trying to avoid the hefty taxes imposed by the state. The state and legitimate sellers of cigarettes were both hurt.

The sale of nontaxed smokes by stores on Indian reservations became an issue two years ago when the state cigarette tax was raised significantly and many smokers took more of their business to reservations — or to Internet sellers — whose packs aren’t taxed. Some folks even bought lower-taxed cigs smuggled in from out of state.

Some wholesalers say sales are down between 20 percent and 30 percent among legitimate cigarette sellers.

State enforcement of the tax laws, meanwhile, has been lax, to say the least. New York, I’m told, has reduced the force working on illegal cigarettes by 80 percent since the tax hike went into effect.

But that’s another story.

So how much extra did the state collect in tax with the law change?

The state Department of Taxation did not return a call for comment.

But according to Calvin’s memo, “Cuomo’s budget office” was saying that cigarette tax revenues were flat this past October and November with the year before.

That seems to mean that Albany is $130 million short on its $130 million projection.

But don’t fear.

The Convenience Store Association says its members saw an improvement in taxed-cigarette sales at the end of last year, presumably because the Indians’ stockpiles of brand-name smokes were running low.

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A side issue: The fact that people aren’t buying cigarettes from legitimate sellers doesn’t necessarily mean they are smoking less.

So if Mayor Bloomberg and the other anti-cigarette crusaders are using this data to pat themselves on the back, they should be prepared to eventually be kicked in the rear.

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It’ll also be interesting to see if recent toll hikes on the Port Authority roads, tunnels and bridges actually do what New Jersey and New York hope they do — raise revenue.

I see a lot fewer cars on the roads and at the Hudson River crossings, and more people on trains. The outrageous cost of gas is also contributing to this lifestyle change.

That’s great for the environment, of course. But the Port Authority wasn’t being ecology-minded when it instituted the increases. It was hoping the hikes would bring in more dough.

And I don’t think that’s happening.

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It is swell that the Federal Reserve plans to publish its predictions about short-term interest rates. Now bond-market prognosticators can keep themselves busy while sitting on the toilet bowl.

But the truth is that you can flush whatever the Fed has to say.

Short-term interest rates will remain low forever. That’s a given, considering the fact that the central bank and Washington can’t seem to fix the US economy.

The fact that inflation worrywarts are leaving the Fed’s voting committee and being replaced by people who should be Ben Bernanke toadies will make opposition to low short-term rates almost nonexistent.

But what’s really important is what will happen to long-term rates, which have remained surprisingly tame despite worldwide turmoil.

These are the rates that drive the real economy — mortgages, for instance, and business loans and student borrowing.

Those rates could be tricky in the year ahead. And the Federal Reserve can neither predict nor control them.

The big problem here is that foreign investors seem to be ditching the dollar and lightening up on their holdings of US government debt.

If foreigners really take a hike, Washington will have to pay more to borrow money, and interest rates will rise for everyone.

The other possibility is that Fed Chairman Bernanke will continue to print money to buy US debt — which’ll work until it doesn’t.

And when it doesn’t, borrowing costs could go blooey.

john.crudele@nypost.com