Government Affairs Albany UpdateJanuary 7, 2005
Governor George Pataki used his State of the State Message to advocate the following Tax Law changes:
- Enactment of a Single Sales Factor for manufacturers;
- New job tax credits;
- Creation of Agri-Business Opportunity Zones;
- High-tech business tax credits;
- Expansion of the Earned Income Tax Credit (EITC) to include lower income, single fathers;
- Appointment of Larry Kudlow to lead an effort to reform New York's tax code by making it fairer, simpler, and friendlier for everyone.6
On Tuesday, December 6, 2004, the state Senate overrode Governor Pataki's earlier veto of a minimum wage bill introduced in July.
The bill, A.11760/S.7682, increased the state's minimum wage from the previous $5.15/hr. to $6.00/hr. on January 1, 2005, and will increase it to $6.75/hr. on January 1, 2006 and $7.15/hr. on January 1, 2007. The bill also increased the food service tip workers base hourly wage from the previous $3.30/hr. to $3.85/hr. on January 1, 2005, to $4.35/hr. on January 1, 2006 and to $4.60/hr. on January 1, 2007.
The bill initially moved very quickly through the Legislature after its introduction this summer on July 20th. The Legislature immediately took up the bill and both house passed it the very next day on July 21st. The Assembly vote was 116 for to 19 against while the Senate vote was 51 for and 7 against.
The bill was delivered to the Governor on July 22nd and he vetoed it on July 29th citing his desire to see the issue addressed at the federal level. He also expressed his concern about the job losses which would result and referenced a recent study by Professors Richard V. Burkhauser and Joseph J. Sabis from Cornell University.
In the study, they stated "A 10 percent increase in the minimum wage causes an 8.5 percent decline in the employment of African Americans (aged 16-24), a 5.7 percent reduction in teenaged (aged 16-19) employment, and an 8.5 percent decline in non-high school graduate employment (aged 20-24)."
The Business Council had consistently opposed this bill, and others like it, explaining the a 38% increase in the minimum wage also brought an additional 38% increase in payroll taxes such as social security, medicare and unemployment insurance as well as workers' compensation premiums which are payroll based.
The Assembly quickly responded by overriding the Governor's veto in a return session on August 11th on a 129 to 19 vote. The December 6th Senate vote was 50 to 8 with Senators Kuhl, Maltese, McGee, Meier, Nozzolio, Rath, Saland and Seward voting against the override.