NEW YORK ( CNN ) -- New York has scrapped a proposal that would have raised taxes on items such as sugary soft drinks , iTunes downloads and haircuts , Gov . David Paterson said Wednesday . New York has dropped proposed tax hikes on items such as haircuts , soft drinks and clothing under $ 100 . Paterson said he was dropping a number of proposed taxes after the Legislature agreed to use $ 1.3 billion in federal stimulus money to help balance the state 's budget next year . `` The proposed tax increases we are eliminating today were only put forward as a last resort when the deficit ballooned to an unprecedented level , '' Paterson said in a written statement . The tax hikes were proposed in December , as part of an attempt to close a $ 14 billion budget deficit for the state 's next fiscal year . Paterson said proposals were being dropped for taxes on sugary soft drinks , clothing under $ 110 , haircuts , manicures , cable and satellite television , digital services such as iTunes downloads , concerts , movies , golf , live theater and health clubs . The high-profile proposed taxes had drawn widespread criticism from New Yorkers . In a statement , Paterson said the federal funding could not serve as an `` excuse to avoid the tough choices we must inevitably make to get our fiscal house in order . Federal funding will cover only a fraction of our overall budget deficit , and the economic outlook remains uncertain , so we must ensure that we use this aid in a responsible manner that strengthens our state 's long-term finances . '' Budget negotiations are ongoing .
New York drops proposed taxes on iTunes downloads , haircuts . Score: 6 David Paterson plans to use federal stimulus money to balance state budget . Tax hikes were proposed to close $ 14 billion budget deficit .