Paterson: Budget Gap May Require New Taxes, Fees

During a closed-door meeting, the heads of the State Senate, the State Assembly and the governor discussed the possibility of a new or increased sales tax, but it's unclear what kind of tax was being considered.

Governor David Paterson says the state may need additional taxes or fees to bridge what could grow to an even wider budget gap if New York doesn't receive Medicaid funding from Washington.

Talks are also strained because the governor wants the final budget plan to include his proposal that would allow individual SUNY and CUNY campuses to control their own tuition rates.

"We have counted into the budget $1 billion of Medicaid relief. And I think it's clear that that is not something that we can rely on. There are conversations now about lowering the amount, that we might receive at least $200 million less than we thought we were gonna get, if we're gonna get anything at all," said the governor.