Taxing times ahead in N.Y.

Gov. pursues security service surcharge
Monday, March 1, 2004

ALBANY, N.Y. - Tucked into a homeland security provision of New York Gov. George Pataki’s proposed 2004 budget is a provision that would create a three percent surcharge on protective and detective services.

At press time, whether that surcharge would also apply to alarm systems was still open for interpretation. A spokesman for the New York State Division of the Budget declined to go on the record to answer the question.

According to John Morrow, president of the New York Burglar & Fire Alarm Association, very few people had even heard about the proposed surcharge.

“I have only had one call concerning this, and it was for clarification,” he said. “We don’t have enough information at present.”

The homeland security provision, under which the security surcharge is found, also includes a proposal that would add a four percent surcharge to tickets for sporting events. The money raised from these two sources is expected to be about $39 million, according to Kenneth Brown, spokesman for the state’s budget office.

That $39 million will not be added to the state’s general fund, but will be used specifically for homeland security measures, Brown said. In all, Pataki has asked that more than $155 million in state funds be dedicated to homeland security initiatives for the fiscal year, which begins on April 1.

“This modest charge will ensure that there is a separate and dedicated funding source to support critical public safety and security activities, such as public security, E-911 and the statewide wireless network,” Brown said. “The bottom line is that this measure will help ensure that funds are available to help ensure the safety of all New Yorkers.”

Brown also pointed out in addition to the charges, there are a number of tax breaks included in Pataki’s proposed budget, which will be phased in over the next two years.

Dale Eller, executive director of the NYBFAA, said the association’s legislative committee had only begun to investigate the ramifications of the proposal.

“It’s pretty vague as it stands right now,” Eller said. “The information we’ve seen is pretty broad-brushed, so who knows to what it is?”

If the surcharge does in fact apply to alarm systems, Eller said he would not be surprised.

“Municipalities everywhere are struggling,” he said. “I guess this just means maybe we’re next up to bat.”

Pataki’s budget proposal includes more than $1 billion in new or increased fees, surcharges and assessments. These are aimed at closing an expected $5.1 deficit for the next fiscal year.