Paterson: Higher taxes, less spending on N.Y. wines

Budget proposal could limit wine trail promotion

The ax and the tax. Those are the two problems New York's wine and apple industries face as they review Gov. David Paterson's budget proposal.

 Paterson proposes to ax much of the spending to promote the sale of wine, grapes and apples. And he wants to more than double the excise tax on wine from 18.9 cents per gallon to 51 cents.

"That's a very bad idea," said Jim Trezise, president of the New York Wine and Grape Foundation, based in Canandaigua. "It could decrease consumption."

Yet Trezise said he was sympathetic to Paterson's predicament, inheriting a high level of state spending just as revenues are driven down by the recession.

The governor's 2009-10 budget plan calls for eliminating the wine and grape foundation's budget. The foundation gets $1 million from the executive budget and $1.8 million from the Legislature. It matches the executive grant with private fundraising, for a $3.8 million budget.

Trezise said if the proposal becomes law, the foundation would have to shut down its efforts to push juice, wines and wine trails -- industries he said have a $3.4 billion impact.

The state Apple Association, based in Fishers, Ontario County, would lose $500,000 under the plan. That could force curtailment of an ad campaign next fall and winter, said president Jim Allen.

A Paterson spokesman, Morgan Hook, said the cuts have to be viewed in the larger context of the fiscal dilemma. And he said a 51-cent excise tax on wine would still keep New York's tax below that of surrounding states.