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Cell-Phone Charges: New York’s Growing Tax
This summer, the Tax Foundation released a map showing the combined local, state, and federal cell-phone tax rates. The map showed, not surprisingly, that New York residents pay the third-highest rate of taxes and fees on wireless service in the country. Our state and local rate is 17.85 percent. When those taxes are combined with […]
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This summer, the Tax Foundation released a map showing the combined local, state, and federal cell-phone tax rates. The map showed, not surprisingly, that New York residents pay the third-highest rate of taxes and fees on wireless service in the country. Our state and local rate is 17.85 percent. When those taxes are combined with the federal tax rate, New Yorker’s wireless-service tax rate is 23.67 percent.
Most wireless customers get a breakdown of costs. Service providers often line-item out these taxes on your bill. In New York, cell-phone users are charged $1.20 every month. This surcharge is known as the “New York Public Safety Commission Surcharge.” In addition to this state surcharge, many of state’s 62 counties charge an additional 30 cents per month. (But 14 counties — Bronx, Delaware, Hamilton, Jefferson, Kings, Lewis, New York, Niagara, Oneida, Oswego, Queens, Richmond, Schoharie, and St. Lawrence — do not charge the additional 30 cents.) Some of this $1.20 state surcharge is earmarked for sensible emergency spending through the Public Service Commission, while other dollars are placed, unfortunately, in the state’s general fund.
Here is a cost breakdown with some history. In 1991, the state began charging the New York Public Safety Commission Surcharge, which was set at 70 cents a month. This 70 cents was used to establish the federally mandated Emergency 911 Centers with the state Public Service Commission. These centers save lives. This was a sensible way to raise revenue to enable our state to implement new technology and connect emergency services so that New York residents would be able to call 911. These call centers dispatch local units and police, ambulance, or fire personnel to respond to emergencies.
However, as New York has faced several budgetary challenges since 1991, that surcharge has been increased and not all of it goes to the E911 or emergency responders. As mentioned, the state surcharge is now $1.20. Out of that, 50 cents gets placed in the state’s general fund. That means that New York collected $84 million from cell-phone users to put into the general fund. This does not include the 4 percent sales tax. Sales tax paid on an $80 monthly “smart phone” bill is $1.80 or $21.60 a year. New York also imposes gross-receipt taxes on wireless companies. That is passed down to the consumer as well.
As can been seen, when government (especially in New York state) gets a tax stream, it is never temporary, and inevitably, over the years it increases. For illustration, one simply has to look at the tolls on the New York Thruway.
The number of cell-phone users has obviously grown significantly. In 1997, there were 48.7 million cell phones in the United States. In 2012, there were 321.7 million nationwide, according to the Tax Foundation. Because of additional users, revenues from these taxes continue to increase.
For government, this revenue is addicting. While establishing a dedicated funding source for projects very often makes sense, too often these taxes are diverted to the general fund and the taxes never seem to go away even after the original project for which the tax was initially established is completed. Our state should use taxes for their dedicated purpose. If that purpose no longer exists, it should give the public back its money.
William (Will) A. Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us, or (315) 598-5185.
Greasing the skids to get the gambling referendum approved
What do you think? Any hint of corruption here? First, New York Governor Andrew Cuomo makes gambling a major plank in his plans for the state economy. He wants another seven big casinos. Several of them will be located Upstate. This despite the unsavory aspects of casinos. Lots of studies in lots of states tell
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What do you think? Any hint of corruption here?
First, New York Governor Andrew Cuomo makes gambling a major plank in his plans for the state economy. He wants another seven big casinos. Several of them will be located Upstate.
This despite the unsavory aspects of casinos. Lots of studies in lots of states tell us crime follows casinos — to the communities in which they locate. They indicate that real economic development does not. They tell us taxes do not end up going down in the regions where casinos locate.
The studies also indicate that casinos prey on addicts. They get most of their profits from them.
Nonetheless, the governor and various politicians are convinced more gambling is good for the state’s economic development. (And please don’t call it “gaming.” That is a moniker dreamed up by PR geniuses.)
There is a lot of money in that “nonetheless.” More than $3 million — that we know about. Gambling interests contributed $361,000 to the governor’s campaign coffers. They contributed $400,000 to the state Republicans’ war chest. And, $415,000 to the Democrats. And, the gambling guys did not overlook the tiny Independents — who vote with the Republicans in the legislature. They stuffed their pockets with $52,000.
Gambling interests dealt out $50,000 dollops to various leaders in the state Senate and Assembly. They poured more into the coffers of the lawmakers who sit on the racing and gambling committees. They even gave $130,000 to the state attorney general. And they spread more money over various other politicians.
This is all part of greasing the skids for this “economic development” that the governor and politicians just happen to support.
After the bucks came in, the governor and the politicians created a curious referendum on these casinos — for you to vote on Nov. 5. The wording is what makes it peculiar — and insulting.
Normally, the wording of a referendum is cold and objective. It is supposed to frame the question in an even-handed way. It is not supposed to tip the scales in one direction or another. Ah, but this referendum’s wording is not so objective. In fact, it ain’t even close.
The governor and legislative leaders changed that wording to make the casinos sound like Disneyworld.
Here it is: “The proposed amendment to section 9 of article 1 of the Constitution would allow the Legislature to authorize up to seven casinos in New York State for the legislated purposes of promoting job growth, increasing aid to schools, and permitting local governments to lower property taxes through revenues generated. Shall the amendment be approved?”
See. The wording suggests the casinos will bring nothing but jobs and lower taxes as well as money for schools. Wonderful, wonderful — we should have one in every community. The wording says nothing about the social ills associated with casinos.
Now, why did these people change the wording? Why have so many of them gotten behind this push for more gambling — knowing the social ills likely to arrive in the wake of the casinos? Why? It wouldn’t have anything to do with the more than $3 million they took in from the gambling guys, would it?
It is not possible they sweetened the wording in exchange for the money, is it? A little quid pro quo?
What do you think? Does money buy preferential treatment in Albany? My guess is that you can bet on it.
From Tom…as in Morgan
Tom Morgan writes about political, financial, and other subjects from his home near Oneonta, in addition to his radio shows and new TV show. For more information about him, visit his website at www.tomasinmorgan.com
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