New York Governor Proposes Important Tax Changes

In December, accelerating the usual state budget process somewhat, New York Governor Paterson released his budget proposals for the 2009–10 fiscal year (the "Budget Bill" or "Bill"), and on January 15, he released various technical amendments to the December proposals. Reflecting the need to balance a budget that has been severely wounded by the recent fiscal crisis against the governor's stated desire to avoid raising business income taxes, the Budget Bill presents an interesting amalgam of sales tax base broadeners and tax increases on wealthy individuals—in particular, nonresident hedge fund managers—without much tinkering with the corporate taxes. While many things may change between now and the ultimate enactment of legislation, scheduled as usual for April 1, the proposals made to date merit review.