Chamber Corner

New York state budget not best for business


President and CEO of the Chautauqua County Chamber of Commerce & Executive Director of the Manufacturers Association of the Southern Tier

As we write this, New York’s governor and legislature have yet to announce a final agreement on a budget for the fiscal year that begins April 1. But they have reached a “conceptual agreement” on a $142-billion budget, and it is not necessarily good for business.

Governor Andrew Cuomo says there is a net tax cut by $650-million over several years and added, “This budget is very much about creating jobs and cutting taxes.”

But is it really? The package calls for increasing the minimum wage and for renewing the 18-a energy assessment, which was intended to be a temporary measure to help close deficits in prior budgets but has since turned into a continuous tax on consumers – one that hits businesses particularly hard.

Brian Sampson, executive director of Unshackle Upstate, said, “On the surface we’re disappointed. The (18-a assessment) was due to sunset and you’ve extended it for another few years. Even if you extend it at a lower rate, it is still a tax increase because it was supposed to go away.”

The budget plan calls for raising the state’s minimum wage to $9 an hour by 2016, despite the fact that study after study shows raising the minimum wage will cause a decrease in jobs and will not positively impact the population it is intended to help. A 2008 Cornell University study titled The Effects of Minimum Wage Increases in New York state: Evidence from a Natural Experiment, concludes that the increase is “unlikely to benefit New York’s working poor because most minimum wage workers who will benefit are not poor, many workers who are poor earn wages greater than state or federal minimum wages, and there are substantial adverse employment effects, which fall quite heavily on low-skilled workers living in poor households.

A decision to increase the minimum wage makes New York state less competitive with Pennsylvania for retaining businesses. In addition, businesses will be less likely to add employees or invest in new technology and equipment if they have to allocate additional resources to payroll.

There are alternatives. The Earned Income Tax Credit program may be a more efficient anti-poverty tool that could help many of New York’s working households without causing adverse employment effects. Another alternative would be to establish a training wage at the current minimum wage, which would benefit businesses that see high turnover rates in the early months of employment.

In the long term the real answer to poverty and underemployment is not wage increases, it is education and training that empowers people with the tools to improve their employment prospects and provide for their families.

Government alone does not create jobs, unless of course they are government jobs. To truly create jobs in this state we must create a fertile, supportive business environment where the private sector can thrive. Venture capital based in New York is investing elsewhere, not because we have too few state run technology hubs, but because it does not make businesses sense. In a state where counties pay some of the highest property taxes in the nation, it is hard to encourage investment.

Thank you for your input

Two weeks ago, the Chautauqua County Chamber of Commerce asked members to log in on our website and answer a few short survey questions. Many of you did just that and we appreciate your time. One hundred thirty-three Chamber members answered five quick questions on Chamber events and training programs, and we wanted to get back to you with the results.

When asked about the importance of Chamber networking events, 26 percent of respondents said they are very important, while another 57 percent said they were somewhat important. Seventy-five percent said social interaction and meeting new people was the most important aspect of the Chamber’s networking events, while 23 percent said learning something new was important to them. Thursday evenings are the most popular night for holding Chamber networking events, with 26 percent of the answers, while another 19 percent said Wednesdays would be good.

Only 23 percent of our respondents have ever attended a Business Over Bagels training event. Seventy-six percent felt “Promoting Your Business” would be the topic they would most like to learn about in an upcoming session.

These survey results will help the Chamber to better meet the needs of our members in the year ahead. We are planning a number of events to assist our members in their need to improve business connections through networking and to learn more about how to better manage certain aspects of their business. Watch for information coming soon on additional Chamber events for 2013.