New York Governor Proposes Security Tax

ALBANY, N.Y.

March 11, 2004 SSI Staff

There will be a 3-percent sales tax on security services,
including electronic security and alarm installations, in
the state of New York if a budget proposal by the state’s
governor is approved. The security tax is among several
revenue-building proposals in Gov. George Pataki’s state
budget that are being debated by New York’s legislature.

According to a spokesperson for Pataki, the security tax,
which will raise $29.3 million, will be earmarked for
public safety measures like installing “E911” technology
that will allow police to trace the locations of 911 calls
made from cell phones.

“The modest change will ensure there is a separate and
dedicated funding source to support critical public safety
activities,” Ken Brown, a spokesperson in Pataki’s budget
division, told Security Sales & Integration. “The
bottom line is the measure will help to ensure funds are
available for security in New York.”

The proposal is drawing criticism from leaders in the
electronic security industry in New York. Bart Didden,
president of USA Central Station Alarm Corp. in Port
Chester, N.Y., and immediate past president of the National
Burglar and Fire Alarm Association (NBFAA), is spearheading
a letter-writing campaign to state legislators in New York
seeking their rejection of the proposal.

“Homeland security is an issue for everybody. Who you’re
really taxing for security improvements are people who have
voluntarily taken security measures of their own,” says
Didden, who estimates home security system owners would be
assessed a $6 to $8 tax on their annual monitoring bill for
having their system. “I think their initial thoughts were
that by taxing this industry, they weren’t taxing
homeowners but corporate America. They should come up with
a $2 tax on everybody’s return. I’d agree to that.”

Pataki is attempting to raise $629 million in extra revenue
for the state and trying to avoid a budget shortfall.
Besides the security tax, he has also proposed a 4-percent
tax on sporting event tickets and $183.3 million in
assessments from hospitals.

Brown says private industry dedicated to security should do
its share to ensure there is funding for public security
measures. “We face tough decisions, but this will ensure
funds are available to protect people in the state,” says
Brown, who adds measures are in place to make sure all of
the security tax revenue goes to security purposes.

That isn’t reassuring for Didden. “The first thing that
always runs through your mind is where is the money going
to go? Every state is mining for money for pork barrel
projects and everything under the sun,” says Didden, who is
backed by a Feb. 18 report by New York State Controller
Alan Hevesi that said the state has diverted more than 40
percent of the funds earmarked for E911 into the state’s
general fund. “We can’t point to an initiative where
they’re going to be putting closed-circuit cameras on every
street. There’s nothing in there that indicates they will
spend it on electronic security. It sounds like a
convenient way to generate a stream of revenue.”

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