UPDATE: Minimum wage likely in the budget
Tying tax cuts for businesses to a gradual increase of the state’s minimum wage appears to have settled this issue in state budget negotiations, according to two Republican senators from the Capital Region.
Until recently Gov. Andrew Cuomo, the Assembly majority and the Senate majority all appeared to be on different pages when it came to raising the minimum wage, which is currently $7.25 an hour. The governor supported a rate of $8.75, the Assembly majority passed a proposal to make it $9 an hour, with increases tied to inflation, and the Senate majority, which includes Republicans and a few renegade Democrats, opposed both measures.
“I’ve consistently opposed increasing the minimum wage,” said Sen. James Seward, R-Milford, who argued previous increase proposals would harm job growth by raising the cost of business.
“Having said that ... if we’re going to do a minimum wage increase, and the Assembly and governor are insistent it should be done as part of this budget, we should mitigate some of the negative impacts,” he said. The mitigating effect would be tax cuts for small businesses, including a credit for businesses that pay minimum wage to people under 20.
Sen. Hugh Farley, R-Niskayuna, was particularly pleased with the targeted nature of the tax cut for businesses that employ young people.
The proposal is for a three-year phase-in of increases, with the rate going to $8 an hour by 2014 and $9 by 2016. There would not be a provision for future increases based on inflation, which Seward described as a positive omission.
“I’m pretty sure I expect to be voting for it as part of an overall package,” he said.
As to whether the budget is business friendly and will lead to job growth, Seward said, "We're heading in that direction ... even with the minimum wage increase."
Farley said he anticipates some final touches being put on the minimum wage package. “The votes are there for a minimum wage increase, there’s no question about it,” he said.
State Sen. Cecilia Tkaczyk, D-Duanesburg, favors tying future increases to inflation, according to her spokesman, Jim Plastiras.
He added that Tkaczyk supports the tax incentives that have been linked to the minimum wage increase, but ultimately favors the Assembly's minimum wage bill, which would automatically raise the hourly rate to $9 and be tied to inflation.
UPDATE 1:55 p.m.: Senate Democratic leader Andrea Stewart-Cousins released this statement:
“As details emerge it is clear that the current minimum wage proposal has some serious issues."
"While increasing the minimum wage to $9.00 is something that the Senate Democrats have long supported, we are disappointed that the current proposal doesn't reach this level for three years, is not indexed to the rate of inflation and does not raise the wages of certain service workers. The Governor and the Assembly all originally proposed acceptable proposals, unfortunately the Senate Republicans have blocked these efforts. We propose removing this discussion from the budget and we stand ready to provide 27 votes for raising the minimum wage quicker, with indexing and for all low wage workers.”
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