Addressing New York’s Affordability Concerns Begins in Albany
Governor Hochul recently stated, “the cost of living is still too damn high” for her reasons behind her plan to send billions of dollars back to New York’s middle-class families. It is a move meant to give struggling New Yorkers a boost, but as generous as it seems, it does not solve the problems that everyday working families face. The root of this problem traces back to poor and expensive policies passed by our state legislature over the past several years that drive up costs for businesses, with a ripple effect on consumers. While rooted in what is sure to be “well-intentioned goals,” these policies leave behind economic inequity and a non-competitive business environment.
Beginning this year, the minimum wage across New York State increased to levels many small businesses could not afford. The advocates and lawmakers who fought for the increase touted a “living wage” without telling you about the additional mandatory payroll costs associated with increasing one employee’s wages. A paycheck bump looks good publicly, but behind the scenes, small businesses paid not only for that hourly increase but also for payroll cost increases per employee to such funds as social security, Medicare, workers’ comp, and New York State Short-Term Disability Insurance. Those who attempted to stay open and navigate the increases had no choice but to pass the costs down to consumers, which is one reason why your meals have increased and your dry cleaning cost more than it used to.
In addition to wage increases, the state’s expansion of paid sick leave and family leave requirements has added new layers of expense and administrative costs for employers. While the mandates provide essential protections for workers, they place a disproportionate burden on small and medium-sized businesses that lack the resources to absorb additional costs, another reason your delivery costs have increased.
The state’s ambitious climate laws, like the Climate Leadership and Community Protection Act (CLCPA), also do not help consumers’ pockets. In fact, there have been repeated calls to give businesses and consumers a price tag for these transitions; however, no one person or agency has been able to do so. Mandates for renewable energy investments and building retrofits will drive up operational expenses for companies of all sizes, causing the costs to trickle down to consumers, who face higher prices for goods and services that will be changed by the CLCPA’s mandates.
Currently, Governor Hochul has a bill on her desk and a decision to make regarding the expansion of wrongful death, a move that would surely increase the number of lawsuits in this state. According to a November 2024 study from the US Chamber of Commerce, each New York State household pays over $7,000, on average, per year in tort costs, costs that allow individuals a vehicle for civil lawsuits. This figure is $3,000 more per household than the national average. Not only will this bill deeply impact New York businesses and consumers dealing with an affordability crisis in the State, but it will also dramatically impact our healthcare system, government services, transportation systems, and schools. Ultimately, it will jeopardize every aspect of our state’s economy.
In a recent “2025 State Tax Competitiveness Index” by the Tax Foundation, New York State ranked dead last of all states. The report said, “New York ranks last on the Index, with high rates and a burdensome and nonneutral tax structure.” The report went as far as to warn, “…taxes matter—and in an era of enhanced migration, they now matter more than ever.”
New York State is often caught in a downward spiral of its own making. While we have long prided ourselves on being a hub of innovation, culture, and economic opportunity, the tax policies enacted by Albany have increasingly undermined these advantages. Our lawmakers and policymakers need to consider the cumulative economic burden of their actions on the residents and businesses they represent.
Heather Mulligan is President & CEO of The Business Council of New York State Inc.
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