With just weeks to go before the state’s budget deadline, the Partnership is working hard at home and in Albany to make sure our key state priorities are addressed.
Last week, I lead a group of Partnership members to Albany for our annual Lobby Day.
The group met with members of the Western New York delegation, Lt. Governor Hochul and key staff to Governor Cuomo to communicate the details of our 2015 State Legislative Action Agenda.
As the Governor, Senate and Assembly begin to hammer out their budget differences, the issue of yet another increase in the state’s minimum wage is heating up.
Under a previous agreement, the state’s minimum wage went up at the end of last year and is scheduled to increase again in December.
The Governor has proposed a third increase to $10.50/hour, which would be one of the highest rates in the country, by the start of 2017.
The Partnership has been on the record as opposing the latest minimum wage hike since the Governor released his proposal in January.
The real impact of the recent, and already approved, increases on small businesses and the Upstate economy has not been fully studied or realized.
Proposing yet another hike on top of the current and planned increases flies in the face of the ‘making-ends-meet’ realities most small business owners face every day.
The New York State Senate heard our message and did not included a minimum wage hike in its One-House Budget Resolution.
Unfortunately, the Assembly took the Governor’s proposal and super-sized it. In its One-House, the Assembly is proposing a massive series of minimum wage hikes with one set of rates for Upstate and another for New York City.
The Assembly’s plan would raise the Upstate minimum wage to $12.60/hour by 2019; the minimum wage would be indexed annually thereafter.
Simple economics tells you that small business owners will never be able to absorb these costs, forcing them to employ fewer people and/or increase the prices of their goods and services.
The threat of yet another round of minimum wage hikes is even harder to swallow given the lack of any real small business tax relief in the Governor’s proposed budget.
The Governor did propose reducing the corporate tax rate from its current 6.5 percent to below 4 percent for businesses with fewer than 100 employees and income (before expenses and any potential losses) of $390,000.
This proposal is estimated to help less than 10 percent of New York State businesses as the vast majority of small businesses do not file income taxes as corporations.
We must do better.
The Senate is proposing more robust and targeted small business tax relief that will hopefully be incorporated into the final budget.
In addition to broadening the Governor’s corporate tax rate reduction plan to include more businesses, the Senate is proposing a 10 percent tax exemption for small businesses that file income taxes through the personal income tax of the owner.
Most small businesses file through personal income tax. As a result, the Senate estimates its proposal will provide a total of $125 million of tax relief to about 500,000 small business across our state.
Check back next week to get the latest on the debate over how to tackle high property taxes in New York and where the Partnership stands on the various plans being discussed as the Governor and Legislature hammer out a final state budget.