$465 million excise tax on syrup for soft drinks proposed by Governor Paterson of New York State

New York Governor David Paterson on Tuesday proposed a budget of nearly $136 billion for fiscal 2011, a 0.5 percent increase from the current year, that will partly close a $7.4 billion deficit by raising taxes on cigarettes and other items.

Paterson said his plan for the year that starts April 1 cuts about $3 billion of spending on education, healthcare and state agency budgets.

He proposed raising $1.1 billion by hiking taxes and fees, including a $465 million excise tax on the syrup that sweetens soft drinks, a $1-per-pack cigarette tax that would raise $210 million and a $216 million levy on healthcare providers.

Justifying the soda and cigarette tax hikes, Paterson said the state spends $16 billion a year on healthcare for smokers and people with obesity-tied diseases, such as diabetes.