We were reminded of President Reagan’s old aphorism, “There is nothing so permanent as a temporary government program,” when we learned that Mayor Bloomberg may have to break his promises to New York taxpayers. “The personal income tax is going to sunset on schedule,” Mr. Bloomberg told New Yorkers in his January 2004 State of the City address. “The sales tax surcharge will also be phased out as scheduled.”

Seven months later, there’s reason to doubt the mayor’s word. The state budget passed August 11 extends the 8.625% tax on clothing purchases under $110 that was supposed to sunset in May 2004. The tax will now remain in effect until May 2005. Many now wonder whether another “emergency” tax measure passed in 2003, the personal income tax increase, will expire according to schedule.

“I’m concerned that it might not sunset on time,” the chief economist for the Citizens Budget Commission, Marcia Van Wagner, told us. “The state and the city will be facing a rather large budget gap this year, and they are looking for ways to plug the gap….There is an incentive to allow the tax not to sunset.”

The city, however, denies responsibility for the extension of raised taxes. “Albany dictates this,” said a spokesman for the mayor, Jon Werbell.

While it is easy for the city to blame Albany for extending the sales tax, the state needs to raise revenue partly to meet the city’s demands. New York City will soon be given $170 million a year from the state to pay off its 1970s debt, a plan against which Governor Pataki fought for months in the courts – and which Mr. Bloomberg has embraced. Another state plan involves paying $138 million of New York City’s costs for the Family Health Plus program this year. The city will also get $300 million more this year in aid for its public schools, partly in response to pressure from a lawsuit that the city has supported. If Mr. Bloomberg expects the state to pick up the tab for these programs, New Yorkers may not see their sales or income taxes lowered. It’s a convenient way for the mayor to benefit from higher tax rates without – once again – breaking his pledge not to raise taxes.

By blaming each other, the state and city avoid having to deal with the out-of control spending that plagues New York. New Yorkers’ tax burden “is the highest in the country,” according to Ms. Van Wagner. “That’s something that affects people’s decisions about where to live and work. It’s not a competitive level of taxation.”

Sunset clauses also undermine federal tax policy. Tax cuts enacted during the Bush administration include provisions for the expiration starting in 2005 of decreased tax rates. “Temporary tax cuts are not a good idea in terms of impacting investing behavior,” a research fellow for the Center for Data Analysis at the Heritage Foundation, Tim Kane, told us. “People change their behavior when they think something is permanent.”

When tax cuts are set to “sunset,” they don’t always produce the desired economic effects, because consumers respond to permanent changes. There’s a real problem, then, when taxpayers expect their higher tax bills to expire – but they don’t. The government has made a permanent change that voters think is temporary. So taxpayers have a harder time planning financially.

Some lawmakers who want to raise taxes want to do so without doing all the work of convincing voters that the move is necessary. Promising “sunsets” is just a way to avoid having to look constituents in the eye and telling them their taxes are going up. But New Yorkers, at least, are catching on to a political truth: There’s nothing so permanent as a temporary tax hike.