With new federal money coming into state coffers because of the stimulus package, New York Gov. David Patterson has dropped a plan for a proposed 4 percent tax on event tickets from his upcoming budget.

The proposed ticket tax was one of several taxes or fees that the governor was proposing to help the state make up the difference from an estimated $13.7 billion budget deficit in next year’s state spending package. Patterson and other state officials believed the event ticket tax would have generated revenues of about $53 million in next year’s budget and $70 million the following year.

“The proposed tax increases we are eliminating today were only put forward as a last resort when the deficit ballooned to an unprecedented level,” said Gov. Paterson said in a statement. “Now that enhanced federal funding is available, our highest priority must be to provide targeted relief to those who need it most during this economic crisis – average New Yorkers struggling to make ends meet.”

Ticket brokers and other ticketing executives opposed the plan because they said it could hurt ticket sales, which could then also affect other ancillary businesses, like hotels or restaurants. In addition to the event ticket tax, other goods and services that would have also seen new or increased taxes or fees under the proposal included cable and satellite television, sugared drinks, digital downloads, manufacturers’ coupons, haircuts and manicures.

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“We applaud today’s decision by Governor Paterson, Speaker Silver and Majority Leader Smith to remove the proposed tax on tickets to live entertainment from the budget bills,” said Jason Berger, managing partner of AllShows.com, who worked to get the proposal removed from the state budget. “This is a victory for consumers in New York State. In tough economic times, the last thing our state needed was a new, onerous tax on entertainment and events. Removing this proposal is a boon to the economy, tourism, the entertainment industry, the venues and New York’s consumers who constantly support live entertainment. Unquestionably, this is a very positive development for Broadway and the fans who love to partake in this cultural phenomenon. Thank you again to the leaders of New York State for removing this proposed tax.”

What Patterson’s action means on the status of a separate, proposed 4.5 percent tax on Broadway tickets in New York City is unknown, but it may end up being dropped, too.
“Taking these taxes off the table is a smart step forward in a budget process that should actually force government to do more with less. If implemented, these taxes would have impaired small businesses and adversely impacted middle income families,” New York Senate Majority Leader Malcolm Smith said in a statement. “We have to take this opportunity to fundamentally restructure New York’s budget to make government more efficient and more effective – and in this fiscal crisis, taxes should be the last thing we consider, not the first. Reducing the rate of growth in our spending while investing in job creation and sound economic development will put New York back on the road to economic recovery.”