The state has a balanced budget, but a good deal of the pain from the $9 billion worth of cuts that were made has yet to be felt. When it is — when those tens of thousands of teachers and state workers start getting laid off, etc. — we wonder how New Yorkers will feel about the restoration of the state’s 4 percent sales tax exemption on clothing purchases, which occurred April 1, but only on purchases under $55.
New York legislators have monkeyed around with this puny tax exemption so many times that most consumers have lost track of where it stands. What began years ago as a pair of week-long sales tax holidays — one before the start of the school year, the other before Easter — morphed into a full-time tax break that was given and taken away at least a couple of times, depending on the state’s economy and the mood of the Legislature. Counties had a choice whether to join in with their own exemptions — some did, others didn’t — but keeping track of what was what hasn’t been easy for consumers, to say nothing of merchants.
And what amounts to savings of only a dollar or two each time at the cash register becomes big bucks for the state — more than $600 million a year. Like the money that was generated by the so-called millionaire’s tax, that’s revenue a state with serious cash-flow problems can ill afford to sacrifice. And yet, when the Legislature rescinded the exemption last fall in an effort to patch a budget hole, it made the move only temporary — restoring the break halfway this April 1 (making purchases under $55 eligible), then all the way in October (exempting the full $110).
So the state will lose upwards of $300 million between now and October — more than enough to save the 10,000 state jobs that Cuomo has suggested may be cut; and $600 million annually thereafter. All so people can save a few dollars when they go back-to-school shopping.