Hotel Tax Raises $100M For Project Going Nowhere

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The New York Sun

Even while Governor Paterson is expressing doubt that the Jacob K. Javits Convention Center expansion project will go forward at any time soon, the state is collecting large amounts of revenue — more than $100 million so far — from a hotel tax passed for the sole purpose of funding the expansion.

Speaking at a Crain’s New York breakfast, Mr. Paterson painted a bleak picture of the overall outlook for New York’s economy and did not rule out the possibility of increasing taxes

“With this kind of fiscal crisis, inevitably we cannot solve the whole problem by just taxing people, and I don’t think we can solve the whole problem by cutting spending,” he said. “We may have to look at both. The reason we are focusing on spending now is because our spending numbers are so out of whack that even with a tax increase, as soon as the increase sunsets, our spending would amplify the budget deficit.”

As of the first quarter, the $1.50-a-night Convention Center Hotel Unit Fee had brought in $103.3 million in revenues since its inception in 2005, according to the State Tax Commissioner’s office.

Mr. Paterson said yesterday that he did not think major development projects such as the redesign of Penn Station or the Javits expansion would be close to completion when his current term as governor ends, in 2010.

“Everyone understands the economy’s a problem, but it’s the situation where, ‘My project must go forward.’ I don’t see any way to make them go forward — the resources aren’t there, the capital isn’t there, and everyone wants to come to government to become part of the solution, and right now the government is floundering because we have these huge deficits,” Mr. Paterson said. “I don’t think if you mention Moynihan and Javits Center, neither of them will be completed by my first term.”

Mr. Paterson said he was aiming to have an evaluation of what projects were feasible by the end of the year.

Under the administration of Mr. Paterson’s predecessor, Eliot Spitzer, plans to expand the Javits Center, which would have added 340,000 square feet of new exhibition space, were scrapped after cost estimates more than doubled, to $5 billion.

A spokesman for Empire State Development Corp., Warner Johnston, said the state was committed to the Javits expansion.

“We are still budgeted at $1.4 billion, and since the summer our design team has been scaling back the original expansion plan. We are going forward with a renovation and a modest expansion,” he said.

The city and state have been unable to breathe life into plans for renovating Penn Station.

Regarding the redesign of Penn Station — known as the Moynihan Station project — Mr. Paterson said it was “essential” that it be a viable transportation hub.

“If it doesn’t include the transportation, its value diminishes considerably as far as I am concerned,” he said.

The New York Sun

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