Politics on the Hudson

Gov.  Paterson and legislative leaders plan to announce later this morning that many of the tax hikes he called for in his budget are being eliminated.

Most likely to go is the 18 percent “obesity tax’‘  on soda and other sugared drinks.  Taxes on items like cable-TV bills and haircuts are also likely to be among the package.

Paterson initially proposed more than $4 billion in new taxes and fees to help close a budget gap he has most recently pegged at $14 billion, and it’s unclear how he plans to make up the money lost by eliminating some of the tax hikes. The most likely source: some of the $26 billion from the federal “stimulus’’ package.

The problem with that, of course, is that the stimulus money expires after next year, while the spending it supports would continue.

And while both houses of the Legislature had planned to pass their own separate budget plans this week, now neither is likely to do so, making the adoption of a final spending plan by the April 1 deadline less likely.

Updated: Paterson said at a news conference this morning that $1.3 billion in proposed revenue from about 132 new taxes and fees will be largely eliminated through use of federal stimulus aid.

“Now that enhanced federal funding is available, our highest priority must be to provide targeted relief to those who need it most during the economic crisis – average New Yorkers struggling to make ends meet,” Paterson said.

Paterson said that when he tours the state, residents complain often about the new taxes and fees. Paterson will be in Rochester later today for the latest in his series of town-hall meetings.

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