From iTunes Tax to Caroline Kennedy: Gov. David Paterson's Wild Year

A New Look at Taxes

In the meantime, Paterson is focusing on his efforts to balance New York's budget, which is $15 billion in the red.

New York Gov. David Paterson, who is legally blind, memorizes his State of the State speech by listening to a recording.

(Judy Sanders, Office of the New York Governor )

"I don't think that [people] get the number. Fifteen billion --- when you start hearing about $700 billion bailouts, what's $15 billion?" Paterson said. "That's fifteen thousand million. That starts to sound like real money."

And losing real money means making real cuts in the budget, which Paterson admitted has been painful.

"A lot of the programs feel there is too much cutting. And they are right. There is about $9.7 billion of cutting. That's probably three or four times the amount we've ever cut before," he said.

"But no one that exacts the criticism can explain to us how to cut this prohibitive amount of money at this time. So, rather than being upset about the criticism, I'm only disturbed if the criticism is coming from one sector. As long as everybody is equally annoyed with us, I think that we are probably doing the right thing," he said, laughing.

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Of course, not everyone is laughing at some of his more unusual approaches to garnering revenue, including new taxes on iTunes downloads and movie tickets.

"If you had told me in August, 'what about these taxes?' I would have said this is ridiculous," he said. "But when your budget deficit goes from $5 billion to $15.4 billion in six months, you're going to have to find some other ways to retrieve money."

And he is very serious about his proposal to tax sugary sodas.

"This idea of taxing sugar in the sodas is very unpopular," he said. "And let me tell you something, if I am the only one standing, I am going to advocate for it. Because when parents find out the relationship between their children's eating choices and these horrible diseases, like type II diabetes and high blood pressure and high cholesterol that they receive, they're going to come looking for the government officials that didn't act at this time.

"The same way that people wanted to know why no one stopped the advertising of smoking for years when it was clearly linked to cancer. And when that day comes, my conscience will be clear."

Despite the dire budget situation, Paterson has not proposed increasing taxes on the wealthiest New Yorkers -- at least not yet.

"I'm not ruling out taxing the wealthy," he said. "In 2003 we taxed the wealthy and I was in favor of it."