State budget negotiators on Friday talked privately of raising taxes on cigarettes, insurers and bankers as lawmakers started working out ways to add hundreds of millions of dollars to education and health care spending.
Government sources said a plan to increase the excise tax on cigarettes by $1.25 per pack was gathering momentum. The idea has been studied for months, and has been pushed by anti-smoking groups that favor an increase of $1.50 per pack.
The proposed $1.25 increase could result in more than $200 million in revenues and would be on top of the current tax of $1.50 per pack, an official said.
Also in the mix was adding to the tax on insurance policies for medical coverage. The so-called covered lives assessment proposed by former Gov. Eliot Spitzer would raise $190 million, but negotiators may approve only some of the increased taxation, one official said. The tax tends to get passed on to policyholders through premiums.
Also on the table were taxes on the banking industry, a credit card tax, extra funds from a tax amnesty program and closing the loophole that allows online retailers such as Amazon.com to avoid taxation, government sources said.
The vendors seeking to develop and run video lottery terminals at Aqueduct Racetrack will likely be expected to come up with a large upfront fee, perhaps as much as $250 million, according to sources briefed on the idea.
Legislative committees on Friday publicly discussed adding $400 million to education aid, which would result in about $1.8 billion more in school funding next year, and $235 million for health care, saving some cuts to providers, particularly nursing homes.
The flurry of work started after state leaders on Thursday agreed to a roughly $124 billion budget plan. Officials expect to complete negotiations by Sunday afternoon, although with the fiscal year starting on Tuesday, full approval will likely be a few days late, officials predicted.
