ALBANY, N.Y. (AP) -- New York's leaders turned Wednesday to the sales tax on clothing and other taxes and fees to balance a budget that's nearly three months late.
Two state officials said one of the so-called "revenue raisers" under discussion would increase the state's 4 percent sales tax on clothing. One of the officials said the proposal includes three or four tax-free clothes shopping periods each year, including before school begins in the fall and at the December holidays. Purchases of footwear and clothing under $110 are currently exempt.
The officials spoke on the condition of anonymity because of the sensitivity of the talks. No other details were immediately available.
Democratic Gov. David Paterson told reporters two specific taxing ideas -- increases in the rate on online reservations and rental cars -- weren't under discussion, but when asked if a clothing sales tax proposal was being discussed he said he wouldn't comment on ideas "piece by piece."
"They have some proposals on the table," Paterson said after a closed-door meeting with Democratic legislative leaders. "We're reviewing them and, frankly, they don't sound bad."
He declined further comment.
Assembly Speaker Sheldon Silver would only say that a number of options were discussed.
Paterson said tax, fee and other increases are needed in part because New York may lose $1 billion its expected in Medicaid reimbursement from the federal government. Paterson said he now expects to lose $250 million of that money, if not all of it. He had planned to use the $1 billion to help address the state's $9.2 billion deficit.
Legislative leaders will soon brief rank-and-file lawmakers on details of the talks.
Silver said he hopes to get a budget passed within days, before Paterson's deadline of Monday to impose one.
Lawmakers would be forced then to accept Paterson's budget provisions as part of an emergency spending bill or shut down government.
The budget so far includes raising the cigarette tax to the highest in the nation. In additon, Paterson's proposal to cap all local property taxes -- among the nation's highest -- appears unlikely at this point.
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