New York has been advertising itself as a business-friendlier state over the last few years. The cheery television commercials have been hard to miss—they tout job creation in the state and other positive changes that have coincided with Andrew Cuomo’s election as governor in 2010.
The claims are beginning to sound as empty as an auto dealership’s come-ons.
Two developments out of Albany call into question the state’s commitment to economic growth fueled by a dynamic private sector. The Democratic governor has joined with leaders of both parties to raise the state’s minimum wage to $9 over the next three years—from today’s $7.25—while extending what was supposed to be a short-term tax hike on the state’s highest earners.
Business-friendly? Not exactly.
The bipartisan deal on taxes surprised even seasoned Albany observers. There was no indication from the governor’s office that he would seek to extend the tax, even though such a departure from stated policy should have received an airing in public.
But when there is no effective opposition party ready to scream bloody murder over such a dramatic change in policy, these kinds of deals can, and clearly do, happen. The fault here is neither Democratic nor Republican. It is systemic. It is bipartisan.
Who was in the back room demanding that the state find another solution to its revenue problems? Where were the voices pointing out that a 24 percent minimum-wage hike will hurt small businesses and inevitably lead to fewer minimum-wage jobs?
Some lawmakers might have been willing to make those arguments, but they were cut out of the deal-making, as they always are in Albany, a place run by three or four men—the governor, the rotating leaders of the State Senate and the speaker of the Assembly. Everybody else is, frankly, irrelevant.
And that’s the problem. New ideas and creative alternatives never make it to the table, because access to the table is so limited. It has been like that in Albany for decades—governors and legislative leaders regularly pledge to change things, but the status quo prevails.
The governor said that hiking the state’s top tax rate to 8.82 percent in 2011 was simply a short-term solution. Skeptics apparently were right in asserting that once a tax goes up, it rarely comes down. So the increased top rate will continue to apply to individuals who make more than $1 million and couples who make more than $2 million annually. It’s likely that the increase will be extended to 2017, when Mr. Cuomo very likely will be preparing for a third term, or perhaps doing business in another capital city.
The minimum-wage hike and the tax increase on high earners certainly call into question the commitment of the governor and the Legislature to the New York described in those glowing and expensive-looking television ads.
Perhaps the state should buy a chunk of airtime on Comedy Central. The audience would be inclined to treat the ads as somebody’s idea of a joke.