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Both New York State and Federal $15 Minimum Wage Bills May Be Introduced Soon

Both New York State and Federal $15 Minimum Wage Bills May Be Introduced Soon

New York State’s panel on fast food wages is set to introduce a new minimum wage recommendation on Wednesday

Los Angeles and Seattle have already instituted $15 minimum wages… is it time for New York City, or the whole country, to do the same?

As the fight for 15 picks up momentum across the country, New York City could be next. After Los Angeles passed a law that would raise the minimum wage to $15 per hour by 2020, New York City mayor Bill de Blasio hinted that New York may follow suit. Now it looks like New York State might be taking steps to make the dramatically increased minimum wage a reality. The New York State legislative panel on fast food wages is expected to propose a new $15 minimum wage recommendation by Wednesday, according to The Wall Street Journal.

The rumors of a minimum wage hike in New York have left many franchisees concerned that they will be let go as a result. The current state minimum wage is $8.75.

“We’re all scared, I have to admit,” franchise owner David Sutz, 58, who co-owns four Burger Kings, told The Wall Street Journal. “We in the New York market are very, very concerned that a lot of us may not survive over the next year.”

At the same time, presidential candidate Bernie Sanders and Reps. Keith Ellison (D-Minn.) and Raul Grijalva (D-Ariz.) are expected to introduce a bill on Wednesday that would raise the national minimum wage to $15 per hour, according to The Hill.

“The simple truth is that working people cannot survive on the federal minimum wage of $7.25 an hour, or $8 an hour or $9 an hour,” Sanders said. "If people work 40 hours a week, they deserve not to live in dire poverty.”


List of Minimum Wage Rates by State 2021

The minimum wage, the lowest hourly amount that an employee may be paid for their labor, is determined by both state and Federal labor laws in the United States. Under the Federal Fair Labor Standards Act, states and localities are permitted to set their own minimum wage rates, which will take precedence over the Federal minimum wage rate if they are higher.

In states that do not set a minimum wage rate, or have an antiquated minimum wage rate that is less than the rate set by the Federal government, the Federal minimum wage rate will take precedence and apply to all employees within that state.

The table below lists the current prevailing 2021 minimum wage rates for every state in the United States. Click any state for details about the minimum wage, exemptions, and other state labor laws. You can find a list of highest and lowest minimum wage rates here.

2021 Minimum Wage Rates By State

State Name Minimum Wage Rate Department Name Rate Adjusted Yearly
Alabama $7.25 / hour Alabama Department of Labor
Alaska $10.34 / hour Alaska Department of Labor and Workforce Development
Arizona $12.15 / hour Industrial Commission of Arizona &check
Arkansas $11.00 / hour Arkansas Department of Labor
California $13.00 / hour California Division of Labor Standards Enforcement and the Office of the Labor Commissioner
Colorado $12.32 / hour Colorado Department of Labor and Employment &check
Connecticut $12.00 / hour Connecticut Department of Labor
Delaware $9.25 / hour Delaware Department of Labor &check
Florida $8.65 / hour Florida Division of Workforce Services &check
Georgia $7.25 / hour Georgia Department of Labor
Hawaii $10.10 / hour Hawaii Department of Labor & Industrial Relations
Idaho $7.25 / hour Idaho Department of Labor
Illinois $11.00 / hour Illinois Department of Labor
Indiana $7.25 / hour Indiana Department of Labor
Iowa $7.25 / hour Iowa Labor Services Division
Kansas $7.25 / hour Kansas Department of Labor
Kentucky $7.25 / hour Kentucky Labor Cabinet
Louisiana $7.25 / hour Louisiana Workforce Commission
Maine $12.15 / hour Maine Department of Labor
Maryland $11.75 / hour Maryland Department of Labor, Licensing and Regulation
Massachusetts $13.50 / hour Massachusetts Executive Office of Labor & Workforce Development
Michigan $9.65 / hour Michigan Department of Licensing and Regulatory Affairs (LARA)
Minnesota $10.08 / hour Minnesota Department of Labor and Industry
Mississippi $7.25 / hour Mississippi Department of Employment Security
Missouri $10.30 / hour Missouri Labor and Industrial Relations Commission &check
Montana $8.75 / hour Montana Department of Labor and Industry &check
Nebraska $9.00 / hour Nebraska Department of Labor
Nevada $9.75 / hour Nevada Department of Business and Industry &check
New Hampshire $7.25 / hour New Hampshire Department of Labor
New Jersey $12.00 / hour New Jersey Department of Labor and Workforce Development &check
New Mexico $10.50 / hour New Mexico Department of Work Force Solutions
New York $12.50 / hour New York Department of Labor
North Carolina $7.25 / hour North Carolina Department of Labor
North Dakota $7.25 / hour North Dakota Department of Labor
Ohio $8.80 / hour Ohio Department of Commerce &check
Oklahoma $7.25 / hour Oklahoma Department of Labor
Oregon $12.00 / hour Oregon Bureau of Labor and Industries &check
Pennsylvania $7.25 / hour Pennsylvania Department of Labor and Industry
Rhode Island $11.50 / hour Rhode Island Department of Labor and Training
South Carolina $7.25 / hour South Carolina Department of Labor, Licensing & Regulations
South Dakota $9.45 / hour South Dakota Department of Labor and Regulation &check
Tennessee $7.25 / hour Tennessee Department of Labor & Workforce Development
Texas $7.25 / hour Texas Workforce Commission
Utah $7.25 / hour Utah Labor Commission
Vermont $11.75 / hour Vermont Department of Labor
Virginia $7.25 / hour Virginia Department of Labor and Industry
Washington $13.69 / hour Washington Department of Labor and Industries &check
West Virginia $8.75 / hour West Virginia Division of Labor
Wisconsin $7.25 / hour Wisconsin Department of Workforce Development
Wyoming $7.25 / hour Wyoming Department of Workforce Service
Puerto Rico $6.55 / hour Puerto Rico Department of Labor and Human Resources
District of Columbia $15.00 / hour District of Columbia Department of Employment Services
Federal $7.25 / hour Federal Department of Labor

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$15 Minimum Wage Would Reduce Poverty but Cost Jobs, Congress Told in Report

WASHINGTON — A bill to increase the federal minimum wage to $15 an hour by 2025 would lift 1.3 million people out of poverty but also put an estimated 1.3 million Americans out of work, the Congressional Budget Office projected on Monday.

The report, which projected higher pay for at least 17 million workers, is likely to fuel both supporters and critics of a House bill that could be voted on as early as next week.

While Democrats expect to hold a vote on the bill, the House leadership and chief proponents of the measure have had to iron out concerns from within the party’s caucus, particularly from members representing more rural districts. The Progressive Caucus has lobbied heavily for the bill, which would phase in the increase to $15, but more moderate members have expressed reservations about the scope of the legislation and its impact on small businesses.

Some holdouts appeared to have been swayed in recent weeks by a proposed amendment, championed by Representatives Tom O’Halleran of Arizona and Stephanie Murphy of Florida, both Democrats, that would require an independent study of the raise after two years — before the minimum wage had increased to $11.15, from the current $7.25.

Representative Steny H. Hoyer of Maryland, the majority leader, said in a letter to Democrats that the legislation would be considered next week, signaling that the House leadership felt confident in its ability to secure enough votes to pass the measure.

The Congressional Budget Office projected smaller effects — both on employment and on poverty levels — if Congress raised the federal minimum wage to only $10 or $12 an hour.

The report found that the most aggressive plan, for $15 an hour, would result in higher pay for at least 17 million workers — and possibly as many as 27 million — in 2025.

The budget office said the bill’s effect on wages “would be unprecedented in recent history” and “place the federal minimum wage at the 20th percentile of projected hourly wages in 2025, higher in the wage distribution than it has been at any time since 1973.”

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That raise would amount to a transfer of income to impoverished Americans, largely from high-income earners. Lower-paid workers would see their incomes rise, mostly at the expense of business owners, who would earn lower profits because of increased labor costs, and other higher-earning Americans, who would pay more for goods and services, like food in restaurants. The economy would be slightly smaller than it would have otherwise been, because of lost efficiency, the report said.

The wage increases would push some Americans out of work, the budget office wrote, though it is uncertain how many would lose their jobs and for how long. The report’s median projection was for 1.3 million Americans to lose employment, but the likely range extends as high as 3.7 million.

“Some people who became jobless because of a minimum-wage increase would be out of work for many weeks,” the authors wrote, “whereas others would be jobless for much shorter periods.”

Critics of the bill cited the report’s high-end job loss estimate and warned of the effects of going to $15 an hour.

“This report confirms what we already knew about House Democrats’ Raise the Wage Act,” said Representative Steve Womack of Arkansas, the top Republican on the Budget Committee, “American workers and families will lose their jobs if this bill is enacted.”

Advocates said the analysis showed that any job losses would be overshadowed by the workers lifted out of poverty and the millions who would get higher pay.

“As a group, low-wage workers would be just unambiguously better off,” said Heidi Shierholz, policy director at the Economic Policy Institute, a liberal think tank that has long pushed for minimum wage increases. “The bottom line is the benefits exceed the costs.”

Ms. Shierholz and other liberal economists also questioned the budget office’s methodology, saying it overlooked recent academic research that has found substantially less job loss from minimum-wage increases than many economists previously expected.

An author of some of that research, Arindrajit Dube of the University of Massachusetts-Amherst, who provided comments to the budget office on an early draft of the report, said Monday that the researchers had addressed some, but not all, of the concerns he raised.


Welcome to Afternoon Albany Pro, Session Report, POLITICO New York's new afternoon roundup of must-know information and analysis coming out of the day's legislative session, written by Jimmy Vielkind and Andrew Weber. You'll receive this newsletter each day the Legislature is in session. If you would like to unsubscribe from this newsletter, visit your Settings page here or contact your account manager.

THIS AFTERNOON IN ALBANY:

The Red Room is set and debate has begun, but the final details of parts of the state budget have still not been inked. Gov. Andrew Cuomo and his aides spent most of Thursday waiting for the chance to begin selling a state spending plan one legislator said will total around $150 billion, increase aid to schools, raise the minimum wage and create a system of paid family leave. Democrats in the State Assembly quickly gave the tentative budget their blessing, but Republicans in the State Senate spent the day mulling the document, particularly its minimum wage component.

They broke around 4 p.m., announcing progress but, tellingly, said they might huddle once again. With the triumphal, kumbaya press conference hanging on their assent, members of both houses began to consider the three budget bills — TED, PPGG and HMH — that were introduced late Wednesday. The Assembly passed the PPGG bill at 4:33 p.m. by a vote of 101-37.

GOOD AFTERNOON — Send tips, news, feedback and corrections to [email protected] and [email protected]

SENATE REPUBLICANS STILL REVIEWING — POLITICO New York’s Josefa Velasquez: The Republican conference in the Senate broke after a more than two-hour closed-door meeting, releasing sparse, if any details, about ongoing budget discussions as the midnight deadline looms. “I believe that the negotiations are just about finished,” said Sen. Cathy Young, a Republican from Olean and head of the chamber’s Finance Committee. Still under discussion is what’s been jokingly referred to in the Capitol as “Frankenwage,” a proposal to increase the statewide minimum wage at a different pace for different regions. … Young said another conference was expected this evening. http://politi.co/22SQT7l

-- Assembly Speaker Carl Heastie, around noon: “There's always details that have to be worked out, even when you have, I'd say, conceptual agreement in certain areas … There's always areas that need to be fine-tuned, but from the Assembly's standpoint, I think we're pretty much satisfied with where things are.” http://politi.co/1SCk5ao

THAT FINAL ISSUE, AND PROCESS CONCERNS — POLITICO New York’s Jimmy Vielkind, Josefa Velasquez, and Keshia Clukey: Just days after Gov. Andrew Cuomo said there would be no special treatment for smaller businesses, state Sen. Jack Martins confirmed the minimum wage rate would ramp up differently at places with fewer workers. Despite promises legislators would be able to review a project list, lobbyists and one lawmaker said there was not yet clarity on how money would be allocated for transportation upgrades. And legislative sources said Assembly Democrats were initially unhappy with the way school aid is being distributed.


2021 minimum wage changes by state

Alaska

Alaska’s minimum wage will increase to $10.34 per hour based on the Consumer Price Index. There is no separate rate for tipped workers.

Arizona

Arizona will increase the statewide rate to $12.15 per hour starting in 2021 based on the Consumer Price Index. The minimum wage for tipped employees will remain at $9 per hour.

Arkansas

Arkansas will implement a minimum wage increase, bringing the rate to $11 per hour as part of a series of annual increases that started in 2019. This increase is the last in the current series. The tipped minimum wage is $2.64 per hour.

California

Small employers who employ 25 or fewer workers must abide by the new California minimum wage order of $13 per hour. Employers with 26 or more employees need to comply with the increased standard rate of $14 per hour. California is one of 7 states that does not allow businesses of any kind to pay a lesser tipped rate.

The following California city and county will increase their rates as well:

  • Belmont: $15.90
  • Daly City: $15.00
  • Hayward: $15.00
  • Novato: $15.00
  • San Diego: $14.00
  • Santa Clara: $15.65
  • Santa Rosa: $15.20

Note: While Los Angeles’ rate for businesses with at least 26 employees will stay the same at $15 per hour, businesses with 25 or fewer employees will be subject to a higher minimum wage of $15 per hour.

Colorado

The rate will change in Colorado to $12.32 per hour after also increasing on January 1, 2020. The tipped rate will increase to $9.30 per hour for the calendar year. The Denver local government is increasing the minimum wage to $14.77 per hour with another increase to $15.87 per hour, which will go into effect in 2022.

Connecticut

The Connecticut minimum wage will increase to $13 per hour starting August 1, 2021 . The tipped rate is $6.38, but bartenders must be paid $8.23 for hours worked.

Delaware

The 2021 rate in Delaware will be increased to $10.25 per hour. The tipped minimum wage is $2.23 per hour.

Florida

Florida is changing their rate to $10 per hour on September 30, 2021 , as part of a 6-year plan to increase it to $15.00 per hour. The tipped minimum wage is $5.63 per hour.

Illinois

Illinois’ rate will increase to $11 per hour, with plans to increase it to $15 per hour by 2025. The rate for tipped employees is $6.60 per hour.

Maine

Maine’s rate will increase to $12.15 per hour, and the minimum wage for tipped employees increases to $6.08 per hour.

Maryland

The rate in Maryland is increasing to $11.75 per hour for employers with at least 25 employees. The increase will continue until it reaches $15 in 2025.

Employers with less than 25 employees must comply with an increase of $11.60.

The tipped employees rate remains the same at $3.63 per hour.

Massachusetts

The rate for employees in Massachusetts is increasing to $13.50 per hour until it finally reaches $15 per hour in 2023. The tipped minimum wage is also increasing to $5.55 per hour, and will increase in steps in tandem with the standard rate.

Minnesota

Minnesota legislators ruled that the rate will increase to $10.08 per hour in 2021 for large employers, and $8.21 per hour for small employers.

Tipped employees must earn the standard wage, there is no minimum wage set for tipped workers.

Missouri

Missouri is increasing its wage in 2021 to $10.30 per hour for non-tipped employees. Missouri’s separate minimum wage rate for tipped employees is $4.725.

Montana

Montana residents will receive an increased rate of $8.75 per hour. Businesses that make over $110,000 annually must pay their tipped employees the standard minimum wage rate.

However, if they make less than $110,000 annually, they are allowed to pay tipped employees $4 per hour.

Nevada

The State of Nevada is increasing the rate to $9.75 per hour on July 1, 2021 . Tipped employees must be paid the standard minimum wage rate.

New Jersey

New Jersey’s rate will increase to $12 per hour. The tipped minimum wage is also increasing to $4.13.

New Mexico

New Mexico will increase their standard rate to $10.50 per hour in 2021. Tipped employees will see an increase to their minimum wage rate when it also rises to $2.55 per hour on January 1.

New York State

The State of New York will increase its standard rate to $12.50 per hour in 2021, except for fast-food workers in the state, whose minimum wage will be increased to $15 per hour on July 1, 2021 .

Officials increased the New York City minimum wage rate for all employees, regardless of business size, to $15 per hour in 2019.

New York workers who receive tips follow a separate pay structure based on what industry they are employed in.

As of January 1, 2021, Ohio employees will receive an escalated pay of $8.80 per hour, and tipped employees will be paid an increased rate of $4.40 per hour.

Oregon

Oregon’s plan to increase the standard minimum wage rate until 2023 continues in 2021 with an increased minimum wage of $12.75 per hour taking effect July 1, 2021 .

South Dakota

South Dakota legislators increase the state rate—which will expand to $9.45 per hour in 2021—annually appropriately based on the Consumer Price Index laid out by the US Department of Labor.

Vermont

According to the Vermont Department of Labor , the state’s minimum wage will increase in 2021 to $11.75 per hour. The minimum tipped wage for employees is $5.88 per hour.

Virginia

The Virginia minimum wage will increase to $9.50 per hour on May 1, 2021 . The rate will increase each year until it reaches $12 per hour in 2023. The tipped minimum wage remains the same at $2.13 per hour.

Washington

Washington State officials approved a minimum wage increase to $13.69 per hour in 2021. The State of Washington does not allow businesses to pay tipped employees at a lower rate than the standard minimum wage.


Why the U.S. needs a $15 minimum wage : How the Raise the Wage Act would benefit U.S. workers and their families

This fact sheet was updated February 19 with a new section on tipped workers.

The federal minimum hourly wage is just $7.25 and Congress has not increased it since 2009. Low wages hurt all workers and are particularly harmful to Black workers and other workers of color, especially women of color, who make up a disproportionate share of workers who are severely underpaid. This is the result of structural racism and sexism, with an economic system rooted in chattel slavery in which workers of color—and especially women of color—have been and continue to be shunted into the most underpaid jobs.1

This fact sheet was produced in collaboration with the National Employment Law Project.

The Raise the Wage Act of 2021 would gradually raise the federal minimum wage to $15 an hour by 2025 and narrow racial and gender pay gaps. Here is what the Act would do:

  • Raise the federal minimum wage to $9.50 this year and increase it in steps until it reaches $15 an hour in 2025.2
  • After 2025, adjust the minimum wage each year to keep pace with growth in the median wage, a measure of wages for typical workers.
  • Phase out the egregious subminimum wage for tipped workers, which has been frozen at a meager $2.13 since 1991.3

The benefits of gradually phasing in a $15 minimum wage by 2025 would be far-reaching, lifting pay for tens of millions of workers and helping reverse decades of growing pay inequality.

The Raise the Wage Act would have the following benefits:4

  • Gradually raising the federal minimum wage to $15 by 2025 would lift pay for 32 million workers—21% of the U.S. workforce.
  • Affected workers who work year round would earn an extra $3,300 a year—enough to make a tremendous difference in the life of a cashier, home health aide, or fast-food worker who today struggles to get by on less than $25,000 a year.
  • A majority (59%) of workers whose total family income is below the poverty line would receive a pay increase if the minimum wage were raised to $15 by 2025.
  • A $15 minimum wage would begin to reverse decades of growing pay inequality between the most underpaid workers and workers receiving close to the median wage, particularly along gender and racial lines. For example, minimum wage increases in the late 1960s explained 20% of the decrease in the Black–white earnings gap in the years that followed, whereas failures to adequately increase the minimum wage after 1979 account for almost half of the increase in inequality between women at the middle and bottom of the wage distribution.5
  • A $15 minimum wage by 2025 would generate $107 billion in higher wages for workers and would also benefit communities across the country. Because underpaid workers spend much of their extra earnings, this injection of wages will help stimulate the economy and spur greater business activity and job growth.

Raising the minimum wage to $15 will be particularly significant for workers of color and would help narrow the racial pay gap.

  • Nearly one-third (31%) of African Americans and one-quarter (26%) of Latinos would get a raise if the federal minimum wage were increased to $15.6
  • Almost one in four (23%) of those who would benefit is a Black or Latina woman.
  • African Americans and Latinos are paid 10%–15% less than white workers with the same characteristics, so The Raise the Wage Act will deliver the largest benefits to Black and Latino workers: about $3,500 annually for a year-round worker.7
  • Minimum wage increases in the 1960s Civil Rights Era significantly reduced Black–white earnings inequality and are responsible for more than 20% of the overall reduction in later years.8

The majority of workers who would benefit are adult women—many of whom have attended college and many of whom have children.

  • More than half (51%) of workers who would benefit are adults between the ages of 25 and 54 only one in 10 is a teenager.
  • Nearly six in 10 (59%) are women.
  • More than half (54%) work full time.
  • More than four in 10 (43%) have some college experience.
  • More than a quarter (28%) have children.

The Raise the Wage Act follows the lead of the growing number of states and cities that have adopted significant minimum wage increases in recent years, thanks to the ‘Fight for $15 and a union’ movement led by Black workers and workers of color.

  • Since the Fight for $15 was launched by striking fast-food workers in 2012,9states representing approximately 40% of the U.S. workforce—California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey, New York, Virginia, and the District of Columbia—have approved raising their minimum wages to $15 an hour.10
  • Additional states—including Washington, Oregon, Colorado, Arizona, New Mexico, Vermont, Missouri, Michigan, and Maine—have approved minimum wages ranging from $12 to $14.75 an hour.11

Not just on the coasts, but all across the country, workers need at least $15 an hour today.

  • Today, in all areas across the United States, a single adult without children needs at least $31,200—what a full-time worker making $15 an hour earns annually—to achieve a modest but adequate standard of living.12 By 2025, workers in these areas and those with children will need even more, according to projections based on the Economic Policy Institute’s Family Budget Calculator.13
  • For example, in rural Missouri,a single adult without children will need $39,800 (more than $19 per hour for a full-time worker) by 2025 to cover typical rent, food, transportation, and other basic living costs.
  • In larger metro areas of the South and Southwest—where the majority of the Southern population live—a single adult without children will also need more than $15 an hour by 2025 to get by: $20.03 in Fort Worth, $21.12 in Phoenix, and $20.95 in Miami.
  • In more expensive regions of the country, a single adult without children will need far more than $15 an hour by 2025 to cover the basics: $28.70 in New York City, $24.06 in Los Angeles, and $23.94 in Washington, D.C.

Workers in many essential and front-line jobs struggle to get by on less than $15 an hour today and would benefit from a $15 minimum wage.

  • Essential and front-line workers make up a majority (60%) of those who would benefit from a $15 minimum wage.14 The median pay is well under $15 an hour for many essential and front-line jobs examples include substitute teachers ($13.84), nursing assistants ($14.26), and home health aides ($12.15).15
  • More than one-third (35%) of those working in residential or nursing care facilities would see their pay increase, in addition to home health aides and other health care support workers.
  • One in three retail-sector workers (36%) would get a raise, including 42% of workers in grocery stores.
  • More than four in 10 (43% of) janitors, housekeepers, and other cleaning workers would benefit.
  • Nearly two-thirds (64%) of servers, cooks, and other food preparation workers would see their earnings rise by $5,800 on a year-round basis.
  • Ten million workers in health care, education, construction, and manufacturing would see a raise—representing nearly one-third (31%) of the workers who would see a raise.

Phasing out the egregiously low $2.13 minimum wage for tipped workers would lift pay, provide stable paychecks, and reduce poverty for millions of tipped workers.

  • There are 1.3 million tipped workers throughout the country who are paid as little as $2.13 per hour because Congress has not lifted the federal tipped wage in 30 years. Another 1.8 million tipped workers receive wages above $2.13, but still less than their state’s regular minimum wage.16
  • Seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have already eliminated their lower tipped minimum wage. In these “one-fair-wage” states, tipped workers in these states are paid the same minimum wage as everyone else before tips.17 For restaurant servers and bartenders, take-home pay in one-fair-wage states is 21% higher, on average, than in $2.13 states.
  • Having a lower minimum wage for tipped jobs results in dramatically higher poverty rates for tipped workers. In states that use the federal $2.13 tipped minimum wage, the poverty rate among servers and bartenders is 13.3%—5.6 percentage points higher than the 7.7% poverty rate among servers and bartenders in one-fair-wage states.18
  • Eliminating the lower tipped minimum wage has not harmed growth in the restaurant industry or tipped jobs. From 2011 to 2019, one-fair-wage states had stronger restaurant growth than states that had a lower tipped minimum wage—both in the number of full-service restaurants (17.5% versus 11.1%) and in full-service restaurant employment (23.8% versus 18.7%).19

Growing numbers of business owners and organizations have backed a $15 minimum wage.

  • In states that have already approved $15 minimum wages, business organizations representing thousands of small businesses have endorsed a $15 minimum wage.
  • Business groups that have endorsed a $15 minimum wage include Business for a Fair Minimum Wage,20 the American Sustainable Business Council,21 the Patriotic Millionaires,22 the Greater New York Chamber of Commerce,23 the Long Island African American Chamber of Commerce,24 and others.
  • Growing numbers of employers have responded to pressure from workers and raised their starting pay scales to $15 or higher. These include retail giants Amazon,25 Whole Foods26 (owned by Amazon), Target,27 Walmart,28 Wayfair,29 Costco,30 Hobby Lobby,31 and Best Buy32 employers in the food service and producing industries, such as Chobani,33 Starbucks,34 Sanderson Farms (Mississippi),35 and the Atlanta-area locations of Lidl grocery stores36 health care employers including Michigan’s Henry Ford Health System37 and Trinity Health System,38 Ohio’s Akron Children’s Hospital39 and Cincinnati Children’s Hospital Medical Center,40 Iowa’s Mercy Medical Center and MercyCare Community Physicians,41 Missouri’s North Kansas City Hospital and Meritas Health,42 and Maryland’s LifeBridge Health43 insurers and banks such as Amalgamated Bank,44 Allstate,45 Wells Fargo,46 and Franklin Savings Bank in New Hampshire47 and tech and communications leaders such as Facebook48 and Charter Communications.49

Our economy can more than afford a $15 minimum wage.

  • Workers earning the current federal minimum wage are paid less per hour in real dollars than their counterparts were paid 50 years ago.50
  • Businesses can afford to pay the most underpaid worker in the U.S. today substantially more than what her counterpart was paid half a century ago.51
  • The economy has grown dramatically over the past 50 years, and workers are producing more from each hour of work, with productivitynearly doubling since the late 1960s. If the minimum wage had been raised at the same pace as productivity growth since the late 1960s, it would be over $20 an hour today.52

Research confirms what workers know: Raising wages benefits us all.

  • High-quality academic scholarship confirms that modest increases in the minimum wage have not led to detectable job losses.53
  • After the federal minimum wage was raised to its highest historical peak in 1968, wages grew and racial earnings gaps closed without constricting employment opportunities for underpaid workers overall.54
  • Comprehensive research on 138 state-level minimum wage increases shows that all underpaid workers benefit from minimum wage increases, not just teenagers or restaurant workers.55
  • Multiple studies conclude that total annual incomes of families at the bottom of the income distribution rise significantly after a minimum wage increase.56 Workers in low-wage jobs and their families benefit the most from these income increases, reducing poverty and income inequality.
  • By providing families with higher incomes, minimum wage increases have improved infant health and also reduced child abuse and teenage pregnancy.57

An immediate increase in the minimum wage is necessary for the health of our economy.

  • Raising the minimum wage now will tilt the playing field back toward workers who have dangerous jobs and little bargaining power during the pandemic.58
  • Providing underpaid workers with more money will directly counter the consumer demand shortfall during this recession.59
  • Even the Congressional Budget Office’s 2019 study of the impact of raising the federal minimum wage to $15 by 2025 clearly showed that the policy would raise incomes of underpaid workers overall and significantly reduce the number of families in poverty.60

Low wages threaten the economic security of workers and their families, who then turn to social benefits programs to make ends meet.

  • In states without laws to raise the minimum wage to $15, nearly half (47%, or 10.5 million) of families of workers who would benefit from the Act rely on public supports programs in part because they do not earn enough at work.61
  • These workers and their families account for nearly one-third of total enrollment in one or more public supports programs.62
  • In states without a $15 minimum wage law, public supports programs for underpaid workers and their families make up 42% of total spending on Medicaid and CHIP (the Children’s Health Insurance Program), cash assistance (Temporary Assistance for Needy Families, or TANF), food stamps (Supplemental Nutrition Assistance Program, or SNAP), and the earned income tax credit (EITC), and cost federal and state taxpayers more than $107 billion a year.63

Notes and Sources

This fact sheet is an update of Why America Needs a $15 Minimum Wage, published by EPI and the National Employment Law Project, February 2019.

Unless otherwise indicated, the figures presented in this fact sheet come from a forthcoming EPI analysis of the 2021 Raise the Wage Act.

1. Kate Bahn and Carmen Sanchez Cumming, “Four Graphs on U.S. Occupational Segregation by Race, Ethnicity, and Gender,” Washington Center for Equitable Growth, July 1, 2020.

2. The analysis is based on the 2021 Raise the Wage Act.

4. Estimated effects of the 2021 Raise the Wage Act throughout this fact sheet are from a forthcoming Economic Policy Institute analysis of the legislation and include benefits for both directly affected workers (those who would otherwise earn less than $15 per hour in 2025) and indirectly affected workers (those who would earn just slightly above $15 in 2025).

5. Ellora Derenoncourt and Claire Montialoux, “Minimum Wages and Racial Inequality,” Quarterly Journal of Economics 136, no. 1 (February 2021) David Autor, Alan Manning, and Christopher L. Smith, “The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment,” American Economic Journal: Applied Economics 8, no. 1 (January 2016).

6. See also Laura Huizar and Tsedeye Gebreselassie, What a $15 Minimum Wage Means for Women and Workers of Color, National Employment Law Project, December 2016.

7. For racial/ethnic wage gaps, see Appendix Table 1 of Elise Gould, State of Working America Wages 2019, Economic Policy Institute, February 2020.

8. Ellora Derenoncourt and Claire Montialoux, “Minimum Wages and Racial Inequality,” Quarterly Journal of Economics 136, no. 1 (February 2021).

9. Alina Selyukh, “‘Gives Me Hope’: How Low-Paid Workers Rose up Against Stagnant Wages,” National Public Radio’s All Things Considered, February 26, 2020 Kimberly Freeman Brown and Marc Bayard, “Editorial: The New Face of Labor, Civil Rights is Black & Female,” NBC News, September 7, 2015 Amy B. Dean, “Is the Fight for $15 the Next Civil Rights Movement?” Al Jazeera America, June 22, 2015.

10. Economic Policy Institute calculation using Current Employment Statistics data from the Bureau of Labor Statistics. Values calculated using the listed states’ share of total U.S. nonfarm employment in calendar year 2019 (prior to the COVID-19 pandemic). For recent minimum wage changes, see the Economic Policy Institute Minimum Wage Tracker, https://www.epi.org/minimum-wage-tracker/. We include the District of Columbia in this list even though it is not a state.

12. Based on calculations from the Economic Policy Institute’s Family Budget Calculator, which measures the income a family needs to attain a secure yet modest standard of living in all counties and metro areas across the country.

13. Congressional Budget Office projections for the consumer price index were applied to the Economic Policy Institute’s Family Budget Calculator.

14. Economic Policy Institute analysis of the legislation, forthcoming.

16. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

17. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

18. Economic Policy Institute analysis of Current Population Survey outgoing rotation group microdata, 2017–2019

19. Quarterly Census of Employment and Wages, 2011–2019.

22. Patriotic Millionaires, “Endorsed Bill: The Raise the Wage Act,” accessed January 22, 2021.

23. Greater New York Chamber of Commerce, “Celebrating Juneteenth,” June 18, 2020.

30. Sarah Nassauer and Micah Maidenberg, “Costco Raises Minimum Wage to $15 an Hour,” Wall Street Journal, March 6, 2019.

31. Hobby Lobby, “Hobby Lobby Raises Minimum Wage” (press release), September 14, 2020.


Unbalanced by Design

New York State’s 2019-20 fiscal year marked the 90th anniversary of its first Executive Budget, presented by Governor Franklin D. Roosevelt in 1929. Constitutional amendments establishing the Executive Budget process had been approved by New York voters in November 1927, capping a more than decade-long bipartisan effort to bring order to what had been a shambolic and fiscally profligate legislative budget process.

The end of the Progressive Era campaign for budget reform in New York was the beginning of a long-running, sporadically litigated dispute over the extent of the governor’s budget-making powers. The ink was barely dry on Roosevelt’s initial executive budget submission when the Legislature began pushing back, seeking to recover some of its former ability to modify spending bills or to get around other provisions of the law.

In a series of landmark decisions over the next 75 years, state courts generally sided with the governor under Article VII of the Constitution. The Legislature’s one attempt to change the constitutional budget provisions was decisively rejected by voters in 2005.

This report was the subject of a May 2019 Hugh L. Carey Policy Forum, at which panelist-speakers included former Court of Appeals Judge Robert Smith and the late Assemblyman Richard Brodsky. The forum can be viewed here.

Yet complaints about the executive budget system still resonate with an emerging generation of lawmakers, issue advocates and journalists. Governor Andrew Cuomo’s recent domination of the budget process has given these complaints fresh relevance.

Critics of the executive budget system point to a fundamental imbalance between the governor and the Legislature. They’re right: when it comes to shaping the annual state budget, the executive and legislative branches are not co-equal. In financial terms, the budget is supposed to be balanced—but the budget-making process decidedly is not.

This imbalance wasn’t foisted on New Yorkers when they weren’t looking. Nor was it invented or exacerbated by activist judges. New York has a strong-executive budget system by design. That system still functions as intended by its farsighted framers more than a century ago.

In exploiting the political advantages of his lead role in the budget process, Governor Cuomo also has pushed the envelope of his budget-making power by attempting to hard-wire some appropriations to separate proposed new laws. But he has not—not yet, at any rate—actually attempted to enforce such language.

The Legislature is not without recourse in the process. It can override line-item vetoes, as it did hundreds of times during Governor George Pataki’s last term. Most importantly, the constitution gives lawmakers a powerful veto of their own—the ability to unilaterally “strike out or reduce” any of the governor’s appropriation line items.

This paper reviews the history and background of the executive budget law in an effort to explain how and why the deliberate imbalance of the system developed. It concludes with some proposals for improving the Legislature’s effectiveness and accountability in the executive budget process without having to amend the constitution:

  • Change the start of the state fiscal year to July 1 from April 1, matching the practice in most other states and returning to the fiscal calendar that was in place when the Executive Budget was established.
  • Establish a nonpartisan Legislative Budget Office to provide objective analysis to all members of the Legislature and the public.
  • Enforce the quarterly financial plan reporting requirements in existing law.
  • Require that adopted budgets be balanced and financial plans presented in terms of generally accepted accounting principles (GAAP).

THE ROOT OF THE PROBLEM

New York’s current executive budget system can be traced back to the state constitutional convention of 1915. The gathering was chaired by Elihu Root, one of the most prominent New York Republicans of his time, who had just completed a term in the U.S. Senate after serving as both secretary of state and secretary of war. The convention’s finance committee was chaired by another leading Republican, Henry Stimson, a former U.S. attorney who had been secretary of war under President Taft and who later served in the cabinets of three more presidents in both parties.

In pushing for a budget process dominated by the governor, Root and Stimson had a strong ally in the Democratic leader of the Assembly, Alfred E. Smith, whose 11 years in the Legislature had convinced him of the need for a strong executive-driven system.

The proposed 1915 budget amendments and proposals to consolidate numerous state agencies and elective offices were packaged with unrelated constitutional amendments in a single all-or-nothing proposition, which was overwhelmingly rejected by voters in November of that year. The budget reform effort, supported by the same bipartisan coalition, was renewed with Smith’s election as governor in 1918. 1

Order from chaos

The shortcomings of New York’s pre-reform budgeting system were vividly recounted in Robert Caro’s The Power Broker:

“… The document that was called a state budget was actually a collection of appropriations drawn up by (legislative fiscal committee) chairmen. No legislator—or any other state official—reviewed the collection, balanced one appropriation against another, cut them down to agreed-upon necessities or measured them against estimated revenue. Even after the document was formally printed, individual legislators continued to introduce their own ‘private’ bills, generally for pork barrel public works projects, which required public expenditures, and these, when passed, did not even appear in the ‘budget.’ No one bothered to add them up, so that, when the Legislature adjourned, no one could be sure how much money it had appropriated. The governor technically had the power to veto appropriations, but since state law forbade him to veto part of an appropriation item, legislators simply made sure that each debatable expenditure was lumped with one too essential to be vetoed.” 2

Despite these obstacles, Governor Smith was able to veto $5 million of the $100 million in appropriations approved by the Legislature in 1919—the equivalent of a governor striking out more than $5 billion in spending from the 2019 state operating funds budget. Smith later said he wanted to veto even more, but “with the time and force at my disposal and under the present organization of state departments and the present system, I was unable to effect greater savings without bringing serious hardship upon essential departments and activities.” 3

To revive the 1915 reform proposals, Smith appointed a “Reconstruction Commission,” which in October 1919 produced a landmark report recommending consolidation of state agencies and “a budget system vesting in the Governor the full responsibility for presenting to the Legislature each year a consolidated budget containing all expenditures which in his opinion should be undertaken by the state, and a proposed plan for obtaining the necessary revenues…”. 4

The commission outlined three objectives that would form the core of today’s system:

  • “restriction of the power of the Legislature to increase items in the budget”
  • “provisions that pending action on this (budget) bill, the Legislature shall not enact any other appropriation bill expect on recommendation of the Governor” and
  • “granting to the Governor the power to veto items or parts of items.”

A governor equipped with executive budget power “would stand out in the limelight of public opinion and scrutiny,” the commission said. “Economy in administration, if accomplished, would redound to his credit. Waste and extravagance could be laid at his door.” 5

To many in the Legislature, this represented an unthinkable departure from traditions of limited government and legislative supremacy. However, the commission said, “those who cannot endure the medicine because it seems too strong must be content with waste, inefficiency and bungling—and steadily rising cost of government.”

As for arguments that the executive budget system would turn the governor into an all-powerful “czar,” the commission pointed out: “Democracy does not merely mean periodical elections. It means a government held accountable to the people between elections.” 6

The commission’s recommendations led to the adoption in 1925 of a state constitutional amendment assigning all civil, administrative and executive functions of state government to no more than 20 departments, most headed by gubernatorial appointees.

The executive budget, however, needed one final push from a blue-ribbon citizens committee chaired by the most eminent New York Republican of the era—Charles Evans Hughes, the former governor, U.S. Supreme Court justice and 1916 GOP presidential candidate, who most recently had served as U.S. secretary of state and who, a few years later, would rejoin the Supreme Court as chief justice of the United States. Hughes had initiated the push for reform of the state budget system during his own gubernatorial tenure (1907-10).

Hughes’ committee repeated the call for an executive budget system, stressing that it should be written into the State Constitution (as Governor Smith preferred) and not merely statutory. The necessary constitutional amendments were approved by the state’s voters in November 1927. The first Executive Budget was presented in January 1929 by Smith’s successor in the governor’s office, Franklin D. Roosevelt.

THE CONSTITUTIONAL FIX

The system put in place by Smith and his allies in the late 1920s, lifted almost verbatim from amendments first proposed in 1915, remains fundamentally unchanged today. Clearly it is the intent of this system to make the governor the dominant, accountable, controlling player in the budget-making process.

The governor’s budget authority is laid out in Article VII Sections 1 through 6 of the state Constitution (see Appendix for full text). The first two sections are non-controversial table-setters, requiring the governor to assemble departmental budget requests, to present a budget (“a complete plan of expenditures … and all monies and revenues estimated to be available therefor”) by certain dates early each year.

Section 3 describes the governor’s responsibility for submitting budget bills and his ability to “amend or supplement” his bills within 30 days of submission, and his ability, with the consent of the Legislature, to submit budget amendments or “supplemental bills” after the budget has been adopted. Budget bills are a unique category of legislation, introduced automatically without legislative sponsorship.

The next three sections of Article VII are the hard core of the executive budget system—and have been the focus of most legal controversies over the years.

Section 4 prevents the Legislature from altering appropriations language “except to strike out or reduce items therein.” It further provides that, once passed, appropriation bills become law without further action by the governor—except that both the legislative and judiciary budget “and separate items added to the governor’s bills by the Legislature” are subject to the governor’s approval or veto.

Section 5 restricts the Legislature’s ability to appropriate money before the governor’s executive budget bills have been “finally acted upon.” Section 6 includes the crucial “anti-rider” clause, which stipulates that the provisions of the governor’s appropriations bills must be “specifically” related to “some particular appropriation” in those bills.

As long as the Legislature doesn’t attempt to alter appropriations bill language, it can add separate line items for any purpose—and if the governor vetoes these items, the Legislature can override his vetoes. In addition, the Legislature has its own veto, in the form of its Section 4 power to “strike out or reduce items” in an Executive Budget appropriation bill before the bill is passed.

Although veto overrides are hardly unheard of—there were hundreds in Pataki’s last term—the Legislature historically hasn’t pursued counter-budget strategies based on its power to strike or reduce the governor’s proposed spending.

Instead, for most of the 75 years following the establishment of the current system, legislators attempted to circumvent the Article VII restrictions on their ability to supplement or rewrite the governor’s budget bills.

Early disputes

Within weeks of Roosevelt’s Executive Budget submission in early 1929, the Republican majorities in the Senate and Assembly sought to test the new constitutional provisions by amending a budget bill clause giving the governor sole authority to “segregate” lump sum appropriations to newly formed state agencies. In the resulting People v. Tremaine case, the Court of Appeals ruled in favor of the governor and said the Legislature could not amend the budget by designating its fiscal committee chairman to play a role divvying up the lump sums. Importantly, the Court also said the Legislature could not attempt to circumvent the governor’s veto power by attaching “other items” to the bill. 7

Ten years later, a second case, also entitled People v. Tremaine *, emerged from the Republican-dominated Legislature’s attempt to substitute its own single-purpose appropriations bill for the itemized appropriations in the 1939-40 Executive Budget submitted by Governor Herbert Lehman, a Democrat. The court again ruled for the governor, closely paraphrasing the language of Article VII, Section 4:

“…[T]he Legislature may not alter an appropriation bill by striking out the Governor’s items and replacing them for the same purpose in different form … It may, however, add items of appropriation, provided such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose. The items thus proposed by the Legislature are to be additions, not merely substitutions. These words have been carefully chosen. The added items must be for something other than the items stricken out.” 8 [emphasis in original]

For years thereafter, the Legislature attempted to get around the constitutional restrictions by inserting new or revised implementing language into appropriation bills, sometimes with the governor’s tacit acquiescence. But this maneuver was definitively barred by the 1993 Court of Appeals decision in the case of New York State Bankers Association v. Wetzler, 9 which was prompted by the Legislature’s addition of a bank audit fee to appropriations language in Governor Mario Cuomo’s 1990-91 budget bill. The Court said the change had violated the “unambiguous” constitutional clause forbidding any alteration of the governor’s appropriations. This further clarified and strengthened the governor’s power (although, ironically, Cuomo himself had not objected to the added fee language).

The latest landmark ruling by the Court of Appeals stemmed from two of Governor George Pataki’s second-term budgets. 10

The first, Silver v. Pataki, arose when the Legislature followed up its adoption of the governor’s 1998-99 appropriation bills by enacting single-purpose, non-appropriation Article VII language bills changing the purposes for which the money could be spent. (For example, a $180 million appropriation for a prison in Franklin County was modified by a separate Article VII language bill dictating the types of inmate activities the facility would have to accommodate.) Pataki vetoed 55 such provisions that he claimed had unconstitutionally altered his appropriations. Assembly Speaker Sheldon Silver filed suit to contest the vetoes.

The second case, Pataki v. Assembly, stemmed from Pataki’s 2001-02 budget bills, which among other things incorporated all of his proposed changes to the local school aid formula in appropriations language, rather than following the previous practice of putting formula changes in a non-appropriations budget bill. Pataki also sought to appropriate money for the State Museum and Library, both under the control of the Education Department and Board of Regents, through a new Office of Cultural Affairs whose creation was proposed in a separate Article VII language bill.

The Legislature responded by deleting the language it deemed unconstitutional in the education appropriations and other areas. Repeating their 1998 approach, the legislative majorities also struck entire appropriations proposed by the governor, and enacted their own bills appropriating identical amounts for similar purposes subject to different conditions and restrictions. This time, with Silver v. Pataki already pending, it was the governor who filed suit.

The two cases were jointly decided by the Court of Appeals in December 2004, with a 5-2 majority of the judges agreeing to hold for the governor in both cases. Within the majority, there was broad agreement with Judge Robert Smith’s opinion that, in both budgets, the Legislature had “altered the Governor’s appropriation bills in ways not permitted by the Constitution.”

But Pataki v. Assembly raised an additional, more challenging question that reduced the five-judge majority to a three-judge plurality: how far might a governor go in using appropriations language to write new laws not strictly related to the budget? Smith described this as “in theory, a troublesome issue, for … the Governor’s power to originate appropriations bills is susceptible to abuse.” 11 He continued:

“A Governor could insert into what he labeled ‘appropriation bills,’ and thus could purport to shield by the no-alteration clause, legislation whose effect is not really budgetary. A few hypothetical questions may illustrate the point: Could a Governor raise a mandatory retirement age for firefighters, by making the higher age a condition of appropriations to fire departments? Could a Governor insert into an appropriation bill for state construction projects a provision that Labor Law §240 (the scaffold law) would be inapplicable? Could an appropriation bill provide that workers in certain state-financed activities were free to engage in conduct the Penal Law would otherwise prohibit? Each of these proposals seems to go beyond the legitimate purpose of an appropriation bill.” 12 [emphasis added]

Pataki’s lawyers had argued that the anti-rider clause of Article VII, Section 6, was the only limit on the content of an appropriation bill. Smith, however, called this “a less than satisfactory answer, because it is quite possible to write legislation that plainly does not belong in an appropriation bill, and yet ‘relates specifically to’ and is ‘limited in its operation to,’ an appropriation.” 13

Judge Albert Rosenblatt wrote a concurrence, joined by one other judge, agreeing with Smith that Pataki’s 2001-02 budget passed constitutional muster, but also arguing that the court should have created a clearer judicial “test” to decide when an item of appropriation crosses into non-budgetary legislating. 14 This was a question Judge Smith and the court’s plurality preferred to “leave for another day.” 15

A lengthy dissenting opinion by then-Chief Judge Judith Kaye, joined by Judge Carmen Ciparick, strongly disagreed with Smith’s rationale in both cases. Judge Kaye said the governor had “overstepped the line that separates his budget-making responsibility from the Legislature’s law-making responsibility, setting an unacceptable model for the future.” 16

Even as these cases were winding their way through the courts, the Legislature was demonstrating just how much power it could wield under Article VII as traditionally interpreted. In 2003, Senate Republicans and Assembly Democrats joined forces to override 116 Pataki vetoes of added spending, tax increases, and a new provision refinancing and dedicating state taxes to pay off New York City’s remaining 1970s fiscal crisis debt. These changes added billions of dollars to the budget.

The new language of Article VII bills

To a far greater extent than any of his predecessors, Governor Andrew Cuomo has included non-budget items, including such major policy changes as a statewide $15 minimum wage, in his non-appropriation budget bills. In 2019-20, the governor went further than ever, packing virtually his entire 2019 legislative agenda into the initial 2019-20 Executive Budget bill package.

Among the more than 80 non-budgetary provisions in the five main Article VII language bills were such disparate items as grand jury reform, legalization of recreational marijuana use, a ban on plastic bags, expanded abortion rights, and a permanent cap on property tax levies.

A few of those proposals, such as the abortion law, had already been embraced by legislative majorities and were passed soon after the budget was presented. Many were deleted from the one-house budget legislation issued by the Senate and Assembly in March. In the end, dozens of Cuomo’s non-budget program priorities were enacted with the budget.

Echoing Chief Judge Kaye’s dissent, critics of Pataki v. Assembly have claimed the ruling cleared the way for governors to rewrite all manner of state laws through budget appropriations. But the plurality opinion in Pataki v. Assembly did not say the governor could use appropriations language to write new laws unrelated to the budget.

Rather, the opinion upheld the plain meaning of the no-alteration clause of Article VII, Section 4. As noted above, even a hypothetical clause suspending the scaffold law on state construction projects (which would, after all, achieve the budget goal of reducing project costs) was among Judge Smith’s examples of language “going beyond the legitimate purpose of an appropriation bill.”

As a legislative negotiating strategy, governors have always been free to use the budget as leverage to seek legislative approval of policies proposed outside the budget. But there remains a question of whether Cuomo is empowered to impose the non-budgetary policy changes included in his budget packages.

The Legislature remains free to reject, rewrite or supplement non-appropriations bill provisions, as long as the effect is not to alter appropriations language. However, starting with the first budget of his second term, Cuomo has floated a new budget-writing tactic that threatens to significantly narrow the Legislature’s options while significantly expanding the governor’s own power.

Pushing the envelope

Among the 30-day amendments to his 2015-16 Executive Budget bills, Cuomo inserted the full text of his proposed ethics reform package into appropriations for the state comptroller’s office. He separately added clauses linking state Education Department and school aid appropriations to the enactment of the teacher evaluation provisions of his non-appropriations Article VII bills.

This language, a red flag for legislators, was removed from the 2015-16 budget bills before their adoption. However, Cuomo revived the approach in connection with several proposed appropriations in his original 2019-20 Executive Budget bills. An example was this paragraph attached to the $3.69 million appropriation for the enforcement program of the state Board of Elections:

Notwithstanding any other provision of law, funds from this appropriation shall not be used or spent unless the legislature has enacted the chapter or chapters of law identical to the legislation amending the election law, in relation to establishing contribution limits and a public campaign financing system to amend the state finance law, in relation to establishing the New York state campaign finance fund and to amend the tax law, in relation to establishing a New York state campaign finance fund checkoff submitted by the governor pursuant to article VII of the New York constitution. 17

A similar clause was attached to a portion of the Division of Housing and Community Renewal (HCR) appropriation, tying funding for HCR’s rent regulation unit to enactment of Cuomo’s non-appropriation bill language encompassing Cuomo’s proposed “Rent Regulation Act of 2019.” 18 In the governor’s Capital Projects budget bill, billions of dollars in appropriations and re-appropriations for the Metropolitan Transportation Authority (MTA) were conditioned on approval of Cuomo’s proposed Article VII non-appropriations bill provision creating a congestion tolling program in New York City. 19

These provisions, like those inserted in the 2015-16 budget bills, would go beyond Albany’s tradition of leaving unsettled appropriation details to be fleshed out “pursuant to a chapter”—post-budget legislation negotiated by the governor and the Legislature.

In his FY 2020 budget deal with the Legislature, the governor once again stepped back from the brink of a potential constitutional dispute. The campaign finance and rent regulation provisions were removed from the final appropriations bill, and those issues were left to be settled later in the legislative session. While a different version of the congestion tolling proposal was enacted with the budget, the provision linking it to the MTA’s state funding was also removed from the appropriations bill.

What if, in a future Executive Budget submission, Cuomo revives this tactic and then insists on enacting such language in a final appropriations bill? The Legislature could respond by striking out the constitutionally questionable appropriations and force the governor to negotiate. Or, it could enact the appropriations but not the Article VII language bill provisions to which they refer. Either approach is likely to lead to fresh litigation. If that happens, Cuomo’s case would appear to be weaker than his Republican predecessor’s in the early 2000s.

In the 2001-02 budget that gave rise to Pataki v. Silver, the governor’s disputed insertion of the entire school aid formula into his appropriations language was, as Smith wrote, designed “to determine how much of the state’s money goes to each school district—almost as purely a budgetary question as can be imagined.” 20 By contrast, Cuomo’s proposed campaign finance and rent regulation reform had political and economic effects reaching far beyond the annual expenditures of two minor state agencies. His congestion tolling proposal likewise had ramifications not limited to the capital funding needs of the MTA.

Given the far-reaching effects of the governor’s proposals in all three cases, a strong argument can be made that Cuomo’s linkage language would violate the anti-rider clause of Article VII, Section 6.

The Legislature strikes back

For an almost unbroken period of 25 years prior to 2011, New York State’s budget was not enacted before the start of the April fiscal year. In some years, the final deal was not reached until several months past the March 31 deadline. Unlike some other states and the federal government, New York State never experienced an actual government shutdown due to its failure to enact a timely budget, since Governors Mario Cuomo and George Pataki routinely submitted temporary budget extender bills to meet payrolls while negotiations dragged on.

While the budget delays created some cash-flow stress for local governments dependent on state aid payments, they had little noticeable impact on the vast majority of New Yorkers. But the chronic lateness fed the impression of terminal gridlock and dysfunction in Albany, adding to the negative financial factors holding down the state’s credit rating.

Senate and Assembly leaders in both parties chafed at the governor’s control of the extender process under Article VII, Section 5, which restricts the Legislature’s ability to appropriate money before the governor’s Executive Budget has been “finally acted upon.” Their annoyance, and Albany’s obsession with late budgets, was reflected in their 2005 proposal to amend Article VII. 21

Key provisions of the Legislature’s proposal, including a supporting statute, would have:

  • automatically imposed a contingency budget whenever the Legislature failed to act on the governor’s budget bills before the start of a new fiscal year
  • given the Legislature unrestricted authority to amend the contingency budget in a single multipurpose bill
  • changed the start of the fiscal year, from April 1 to May 1 and
  • required the annual state budget to include school aid appropriations for two years.

The constitutional change would have marked a fundamental shift of power in the state Capitol. For the first time since the late 1920s, the Legislature would ultimately have gained the upper hand in budget disputes with the governor. The result would have been less fiscal discipline, higher spending and higher taxes—all without improving the efficiency, transparency or accountability of the state’s much-criticized budget process. As former Governor Hugh L. Carey said at a 2005 Empire Center conference, this was “a power grab and a purse grab.” 22

The proposed changes, submitted to voters as Proposition One, were supported by legislative majority leaders but opposed by Pataki as well as then-Attorney General Eliot Spitzer, then preparing his own run for governor.

In the Nov. 8, 2005, general election, voters statewide rejected Proposition One by a nearly 2-1 margin.

Meanwhile, Pataki v. Assembly had little visible impact on the governor’s continuing rocky relationship with the Legislature. Pataki briefly invoked the decision in connection with the last budget of his tenure 2006, when he vetoed and challenged the constitutionality of several legislative changes to his budget as violating the no-alteration clause. But the governor and the legislature soon resolved these differences, much of the disputed spending was restored, and the disputed bill language revised to the governor’s satisfaction in an amended budget bill. 23

The next significant exercise of gubernatorial control over the budget came in 2010, under Governor David Paterson. Like his predecessors, Paterson had sent the Legislature temporary extender bills once the state had gone two weeks into the fiscal year without adopting a final budget. But when the Senate and Assembly refused to budge on spending demands far beyond what Paterson thought the state could afford, the lame-duck governor began to force-feed them large chunks of the full annual budget bills. The budget effectively had been enacted in this piecemeal fashion by the end of June.

Paterson’s strategy succeeded because the then- 30-member Republican minority conference in the 62-member Senate was in the Democratic governor’s corner, assuring him of more than enough votes to block a veto override. 24 In July, after the regular session had ended, Paterson vetoed 6,681 budget items, including $419 million in added aid to public schools and nearly $200 million in pork-barrel grants. While the Legislature had to return to Albany in August to approve a revenue bill, Paterson’s vetoes went unchallenged.

When Cuomo took office a few months later, Paterson’s strategy was fresh in legislators’ minds (and Republicans had regained a narrow Senate majority). Armed with a mandate to control spending and a determination to bring order to the process, the new governor ultimately was able to steer the enactment of four straight on-time budgets in his first term.*

Self-inflicted “extortion”

A new twist in New York’s 2019-20 budget process was the unprecedented linkage between “timely” passage of the budget and a legislative pay raise—a condition imposed by a committee on compensation created by the Legislature in 2018 as part of the 2018-19 budget. 25 The governor’s added ability to pressure lawmakers into a budget deal was compared by one member, not unreasonably, to “extortion.” 26 But the Legislature itself set the stage for this situation by delegating the salary issue to the compensation committee. 27

The Legislature passed up an opportunity to permanently veto the resulting committee report and recommendations at the end of 2018. Even now, the entire compensation scheme—as well as the 1998 law temporarily withholding legislators’ pay when a budget is late—could be repealed by the Legislature at any time.

In fact, short of closing a budget deal on the governor’s terms before April 1, the Constitution gave the Legislature other avenues for passing a timely budget while giving the governor an incentive to return to negotiations on disputed items. For example, lawmakers could have selectively deleted all or most of the proposed appropriations for the Empire State Development Corp., which administers economic development programs largely controlled by and closely identified with the governor. It could also have deleted his constitutionally questionable appropriations for the Board of Elections, HCR and the MTA capital budget.

In the short term, given the priorities of the large new Senate Democratic majority and the Democratic super-majority in the Assembly, a successful legislative budget counter-strategy is more likely to produce budgets exceeding Governor Cuomo’s preferred spending limits. But weakening the constitutional underpinnings of New York’s executive budget system would yield far more spending and debt regardless of the Legislature’s political composition. Al Smith and the other Progressive Era framers of the executive budget system aimed to promote economy and efficiency in government, and preserving Article VII is the best way to achieve it.

Ready reforms

Constitutional questions aside, a handful of statutory reforms—and one behavioral change—would give lawmakers more time to consider and deliberate on the Executive Budget, provide them and the public with more information, and subject both the Legislature and the governor to a higher standard of financial accountability.

1. Move the fiscal year start to July 1. This would match the existing schedule in 46 states and the City of New York. It would restore the state fiscal calendar in effect during New York’s first 15 years under the executive budget system, allowing more time for legislative analyis and consideration of a budget that the Constitution requires the governor to submit between mid-January and Feb. 1.

In the past, legislators and governors have resisted shifting the fiscal year to July 1 out of concern that a budget process stretching nearly to the end of the legislative session would overshadow other issues. But it’s not as if that hasn’t already has happened it was the case more often than not between 1985 and 2010.

A three-month shift in the fiscal year, including an early June adoption—would create cash-flow management issues for local governments and school districts, but these issues would not be insurmountable and could be addressed during a transition period to the new fiscal year.

Extending the budget process through most of the session also would eliminate Governor Cuomo’s main rationale for packing his program items into Article VII budget bills, and it would allow the budget to be finalized after the final settlement on personal income tax receipts in mid-April.

2. Establish a Legislative Budget Office. The Legislature allocates funds to four separate fiscal committee staffs, answerable to the respective party leaders of the Democratic and Republican conferences in each house. The fiscal staffs have been respected over the years for the professionalism and the caliber of their work, but much of it is needlessly duplicative.

The shortcomings of the current system are illustrated by the spotty implementation of Legislative Law provisions requiring that, before voting on the governor’s budget bills, the Assembly and Senate must give their members a “comprehensive, cumulative” report detailing revisions to the Executive Budget and the impact on general funds and state funds spending, along with an estimated impact of changes on local governments and the state workforce. In practice, these requirements have not been fully met. At best, these reports have been inconsistent and incomplete. They rarely are made public, even after budget votes.

A bill 28 introduced by Sen. Liz Krueger, D-Manhattan, chair of the Finance Committee, would combine existing appropriations for legislative fiscal committees into a single nonpartisan Legislative Budget Office (LBO), modeled on the Congressional Budget Office. Its mission would be “to provide budget, economic and policy analysis for the residents of the state and its elected officials” and “to increase the legislature’s understanding of the budget and how it affects New Yorkers.” Similar joint nonpartisan committees exist in California and in New Jersey, among other states.

3. Go with GAAP. The Constitution requires the governor to propose a balanced budget, and the 2007 Budget Reform Act requires the Legislature to adopt one. But by statute, New York’s financial plans are calculated on a cash basis, which recognizes receipts when money is received and disbursements when money is paid out. This accounting standard makes it easier to manipulate the budget’s perceived fiscal integrity and sustainability by, for example, rolling one year’s expenditures into the next, or vice versa.

A better standard for budgeting would be the “modified accrual” method consistent with Generally Accepted Accounting Principles (GAAP), which requires revenues to be recognized when actually earned, and expenditures to be recognized when a liability is incurred. The standard was imposed on New York City during the mid-1970s financial crisis as a way to minimize the kind of accounting gimmicks that had helped drive the city into virtual bankruptcy.

Since the early 1980s, the governor’s financial plan reports have included alternative summary tables prepared on a GAAP basis—which, in contrast to the state’s “balanced” status on a cash basis, estimates a $2.1 billion all funds operating deficit as of 2019-20. 29 (The difference relates primarily to differences in the timing of spending and revenues, and use of reserves, as counted by the two methods.)

A primary reason for the adoption of the executive budget system was the framers’ view that the Legislature was chronically averse to accountability and prone to fiscal irresponsibility. —A move to GAAP would demonstrate that the Legislature is willing to hold itself—and the governor—to a higher standard than now applies.

4. Enforce quarterly financial plan deadlines. Under Section 23.4 of the state Finance Law, the governor is required to submit a financial plan update to the comptroller and the chairs of the legislative fiscal committees “within thirty days of the close of the quarter to which it shall pertain.” Since the third quarter ends around the time of the Executive Budget’s preparation, and the fourth quarter ends with the fiscal year, the practical effect of the provision is to require reports to be issued on July 30 (the first quarter update) and Oct. 30 (the mid-year update).

While his first quarter updates have been timely, Governor Cuomo has failed to honor the mid-year update deadline for eight consecutive years, during which the release dates of that report have ranged from Nov. 6 to Nov. 29. The governor and Legislature have also begun to ignore the “quick start” provisions of the 2007 budget reform law, including a Nov. 5 deadline for issuing reports on receipts and disbursements, and the Nov. 15 deadline for holding a joint public meeting to go over the estimates.

Quarterly financial plan updates, especially the mid-year report, are important disclosure documents. A Legislature that aspires to play a more meaningful role in the budget process should at a minimum insist on having timely access to information required by law—and meet its own obligations in the bargain.

Albany’s checkered history of excessive spending, debt and taxation is proof enough that the executive budget system isn’t perfect. The worst budget outcomes of the last half-century have overwhelmed constitutional mechanisms designed to promote fiscal restraint. But politics, not constitutional flaws, are ultimately to blame for the most frequently criticized aspects of New York’s budget process today.

To paraphrase Winston Churchill’s aphorism about democracy, the executive budget system might be called the worst form of budget-making—except all the others that have been tried here from time to time.


Share All sharing options for: The $15 minimum wage bill has all but died in the Senate

Workers and labor activists urge Congress to pass the Raise the Wage Act on July 18, 2019, in Washington, DC. Alex Wong/Getty Images

It’s official: The Senate has no plans to raise the federal minimum wage anytime soon.

A spokesperson for Sen. Lamar Alexander (R-TN), who chairs the Senate Committee on Health, Education, Labor, and Pensions, told Vox that the committee is not considering a bill that would raise the federal minimum wage to $15 an hour, or any other increase, for that matter.

Republican opposition to the Raise the Wage Act in the Senate was expected, but the news essentially ends — for now — a years-long campaign to raise wages for millions of workers by lifting the current $7.25 minimum hourly wage.

Judy Conti, director of government affairs for the National Employment Law Project, said that blocking the bill will end up hurt Republican senators.

“Even the Chamber of Commerce acknowledges that it’s time to raise the federal minimum wage,” Conti wrote in an email to Vox. “[Alexander] may be retiring next year and happy to ride that time out without doing anything productive, but other members of the Senate don’t have quite the comfort level to be as complacent as he is.”

In the House, things went differently. A total of 231 members voted in favor of the Raise the Wage Act, including three Republicans, and 199 opposed it.

Its passage was a short-lived victory for fast-food workers, who have been pushing for a $15 minimum wage across the country for more than five years. And the bill would have had a huge impact on working families. It was expected to boost pay for 27 million US workers, lifting 1.3 million households out of poverty, according to an analysis released earlier this month by congressional economists.

But the sharp pay increase made some lawmakers nervous. The Congressional Budget Office said it could trigger 1.3 million job losses for low-paid workers. Yet most recent academic research suggests that’s unlikely and would lead to few if any lost jobs. To appease moderate lawmakers, House Democrats had amended the bill to phase in the $15 minimum wage over seven years instead of six.

But the Raise the Wage Act would have done much more than lift wages. It would have tied future changes to the minimum wage to changes in middle-class pay, and would have gone far in boosting paychecks for underpaid workers at a time when employers refuse to do so on their own.

Despite the bill’s unglamorous death in the Senate, its passage in the House is a major step forward for low-income families. And, depending on the outcome of the 2020 election, Democrats are likely to try again in a few years.

The Raise the Wage Act, explained

Congress set a record in June: It had been more than 10 years since lawmakers raised the federal minimum wage, the longest period in history that it’s stayed stagnant.

The current $7.25 minimum hourly rate was set in 2009, right in the middle of the Great Recession. Since then, America’s lowest-paid workers have lost about $3,000 a year when you consider the rising cost of living, according to calculations from the Economic Policy Institute.

Enter the Raise the Wage Act, which House Democrats introduced in January to raise the federal minimum wage to $15 an hour by 2024. The bill, which had more than 200 co-sponsors (all Democrats), also phased out the lower minimum wage for tipped workers such as restaurant servers and valets, which has been $2.13 an hour since 1996.

Big business groups have not been happy about the fight for $15. Neither have their Republican allies in Congress, who have long pushed back against any effort to raise the federal minimum wage.

But it’s hard to deny how popular the idea is with regular voters. Poll after poll shows widespread support for raising the federal minimum rate, even among Republican voters. And a majority of voters want at least $15 an hour. It’s no wonder why the vast majority of Democrats running for president have promised to double the federal minimum wage.

Corporate America must have sensed the shift in public opinion too. McDonald’s executives recently announced that the company would no longer lobby against minimum wage increases. The president of the US Chamber of Commerce said earlier this year that he was open to the idea of raising the pay floor.

For a while, Democrats were torn on how much to raise wages. Rep. Terri Sewell (D-AL) introduced an alternative bill in April, which would create different minimum wage levels depending on the region. Only businesses in the most expensive areas would have to pay workers at least $15 an hour by 2024. The main problem with that bill, though, is that every state needs to hike minimum pay. There’s really nowhere in the country where minimum wage workers can afford to rent a modest two-bedroom apartment if they work full time.

In July, however, Democrats signaled that they finally had enough members on board to pass the $15 wage bill.

Research shows multiple benefits of raising the minimum wage

The impact of raising the minimum wage is one of the most closely studied — and debated — subjects in economics.

It used to be taken for granted that raising the minimum wage would decrease the number of low-wage jobs, and that teenagers would have more difficulty finding part-time work. Economists published research in the 1970s showing that it did happen, likely because restaurants and department stores had to cut jobs and work hours to cover the cost of paying employees more.

But in the past decade, progressive economists have challenged these assumptions with new data that is now available.

Dozens of Democratic-held cities and states have increased the minimum wage floor over the years, well above the current federal minimum of $7.25 an hour. Recent research suggests the worst-feared consequences of minimum wage hikes did not come to pass: Employment did not decrease in places where wages went up, and there was actually a residually positive effect on wages for other lower-income workers.

Today, there are two things most mainstream economists agree on: First, that raising the minimum wage increases the average income of low-wage workers, lifting many out of poverty (depending on how big the raise is). Second, that raising the minimum wage likely causes some job losses.

However, disagreement often revolves around how extreme the job cuts would be. A white paper from Anna Godoey and Michael Reich at Berkeley in July provided more evidence that the impact on jobs is insignificant. (A recent Congressional Budget Office analysis, which forecast 1.3 million job losses from a $15 hourly wage, did not include findings from that study because it was only released in July.)

The Berkeley study found that raising the federal minimum wage to $15 an hour by 2024 would likely boost incomes for the poorest households in rural counties. They found no evidence that such a large wage hike would lead to significant job losses or fewer work opportunities.

The research of Godoey and Reich, who analyzed pay data for millions of households in more than 750 counties, stands out for several reasons. First, it’s the only major pay study that relies on county-level income data, making its conclusions more precise previous research has focused almost exclusively on state-level data. More local data allowed researchers to get a better sense of what could happen in rural counties, compared to urban centers.

Second, it focuses on the impact of raising pay in areas with the largest share of minimum wage workers. Previous research has mostly focused on cities and states that have already raised the minimum wage, where workers tend to earn more money. And third, it’s the first research paper to analyze a wage hike as high as $15 an hour. Before, the highest pay rate studied was $13 an hour.

To find out how a $15 minimum wage might affect rural areas, researchers measured the gap between the minimum wage and the median wage in those areas if they had a $15 hourly pay floor. Then they compared it to places with a similar gap. That allowed researchers to calculate what might happen in rural counties. They found no negative effects on jobs.

In sum, “the US can absorb a $15 minimum wage without significant job losses, even in low-wage states,” Godoey told journalists in a conference call.

The study is hardly definitive, but it adds to a growing body of research that is challenging long-held assumptions about the impact of raising the minimum wage: specifically, the view that it would hurt workers more than it would help them.

The most recent meta-analyses on minimum wage increases, which analyze several research findings together, also suggest that the increases’ likely impact on employment would be minimal.

Take the 2016 study by economists at Michigan State University, which crunched data from 60 studies on the minimum wage in the United States since 2001. It concluded that a 10 percent increase in the minimum wage would likely reduce overall employment in low-wage industries by 0.5 to 1.2 percent.

Another meta-analysis comes in a highly anticipated study published this month in the Quarterly Journal of Economics by economists at the University of Massachusetts, University College London, and the Economic Policy Institute. They studied data from 138 cities and states that raised the minimum pay between 1979 and 2016. The conclusion is that low-wage workers received a 7 percent pay bump after a minimum wage law went into effect, but there was little or no change in employment. The study also showed that it would not cost jobs, even in states with large shares of minimum wage workers.

“We’re overdue for an increase that would boost growth and minimize income inequity,” Kate Bahn, an economist at the Washington Center for Equitable Growth, told Vox.

Here’s what the Raise the Wage Act didn’t do

The Raise the Wage Act was not perfect there are millions of low-wage workers who would have gotten zero pay increase under the law. That’s because federal labor laws exempt so many workers from its protections.

It’s important to keep in mind that minimum wage laws enshrined in the Fair Labor Standard Act do not cover all workers, including those in the gig economy. Under federal law, businesses do not need to pay independent contractors and freelancers the minimum wage or overtime. Think Uber drivers and Instacart workers who are still arguing that they’ve been misclassified as independent contractors.

The Fair Labor Standards Act also excludes farmworkers and some domestic workers from the right to earn the minimum wage or get overtime pay. They were excluded as a concession to Southern lawmakers, whose states were highly invested in paying low wages to these groups of workers. At the time, that workforce was overwhelmingly black and Latinx, and excluding them from a minimum wage was intentional. Today, about a quarter of farmworkers and 67 percent of housekeepers earn less than the minimum wage.

These loopholes reveal the limited impact of raising the federal minimum wage. American workers need more than a minimum wage increase — they need more expansive labor reforms. A $15 minimum wage is just the first step.

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Brace Yourself, New York

As if a second wave of Covid-19 infections weren’t enough, New York’s prospects for economic recovery will face new headwinds—from Albany.

When most of the state’s record 1.9 million mail-in ballots were finally counted this week, it became clear that the New York State Senate’s existing 40-member Democratic majority would grow by at least two seats—giving them their first-ever two-thirds supermajority of the 63-member chamber, enough to override gubernatorial vetoes.

The landmark comes two years after Democrats took control of the legislature’s upper house for only the third time since World War II. Combined with their long-standing supermajority in the 150-member assembly, legislative Democrats now are positioned to have the final word on New York State’s response to enormous state and local budget gaps created by the instant pandemic recession last spring.

As of November, Albany faced a budget shortfall of about $8 billion for the current fiscal year and $16.7 billion for 2022, which begins April 1. Allowing for Governor Cuomo’s habitual inflation of budget numbers, reduce those projected deficits by one-third and the outlook for Albany remains as difficult and challenging as it’s ever been. Federal aid, if and when it flows, will be only a temporary stopgap.

Over the past 25 years, the state government has become increasingly dependent on revenues generated in Manhattan offices and trading floors that remain largely vacant. Government spending, now running far ahead of even the most optimistic revenue projections, must adjust to new economic realities.

But economic reality doesn’t factor into the rising Albany worldview. On average, the state’s incoming class of legislators are more inclined to tax, spend, and regulate—and far from hesitating to impose more restrictions on a shaky economy, they see the pandemic-driven crisis as an opportunity to be exploited.

Months before the election, responding to Cuomo’s early warnings of major budget reductions, most incumbent Democrats in both houses had signed onto a union-backed call to “minimize devastating budget cuts” by “rais[ing] taxes on high wealth”—notwithstanding the already-disproportionate share of state and city taxes generated by the highest-earning 1 percent. Senate and Assembly rank-and-filers have introduced more than a dozen tax-hike proposals aimed at both individuals and corporations, starting with three bills raising the state’s 8.82 percent marginal tax on millionaire earners to as high as 10.32 percent (more than 14 percent in New York City) for “ultra-millionaires.” A one-house version of this measure has been passed repeatedly by Assembly Democrats in recent years.

Other tax proposals included a revived stock-transfer tax, higher property taxes on non-primary “pied-à-terre” homes valued at $5 million or more, and a “Billionaire Mark to Market” wealth tax, which its proponents claim would raise a whopping $23 billion in its first year. (The wealth tax would clearly violate New York’s Depression-era state constitutional prohibition of taxes on intangible property—which hasn’t stopped it from winning the support of New York’s most prominent urban progressive, Rep. Alexandria Ocasio-Cortez of Queens.)

Then there’s the ultimate article of faith of among a now-larger number of legislative Democrats: a state-run single-payer health plan, which would require massive tax increases all by itself.

So far, Governor Cuomo has resisted the call for tax hikes, pointing out that high earners could respond by moving away. Instead, he’s delayed significant budget cuts while continuing to demand federal aid to the state, New York City, other localities and, not least, the deficit-ridden Metropolitan Transportation Authority. By the same token, Cuomo warned again this week that if federal aid doesn’t materialize soon, he’ll resort to a combination of spending cuts, borrowing—and income-tax increases.

Asked how the Democrats’ Senate gains would change the balance of power in Albany, the governor replied, “supermajority or not, it doesn’t really make a difference.” He knows better, though. When legislators are in a position to neutralize gubernatorial vetoes, it makes a huge difference.

Just ask George Pataki, New York’s last Republican governor. During his third and final term, from 2003 through 2006, hundreds of Pataki’s line-item budget vetoes were overridden by an alliance of Assembly Democrats and Senate Republicans. In a bipartisan revolt led by Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno, lawmakers added billions of dollars in spending to Pataki’s budget proposals (which weren’t exactly lean to begin with). They also raised New York State and New York City taxes by billions of dollars (temporarily, it turned out).

As Pataki’s experience shows, in a fiscal pinch, party labels and regional preferences matter much less than practical politics. New York legislators invariably have more incentive to spend without worrying about the long-term consequences, while governors, regardless of party, see an institutional self-interest in keeping a lid on the budget.

In 2020-21, members from New York City will continue to control a critical mass of votes in both houses, including seven new Assembly members who won primaries against senior members in Brooklyn, Queens, and the Bronx. Like their New York City colleagues, most incumbent and newly elected members of the Senate Democrats’ enlarged upstate contingent also lean left on fiscal issues, in particular. Resistance to a soak-the-rich tax agenda might come from members representing highly taxed, affluent downstate suburbs—although, like their Republican predecessors, these senators also will fight cuts in state aid to their lavishly well-funded school districts. In suburbs and upstate rural areas alike, it won’t be particularly hard even for moderates to resist spending cuts under the pretense that it’s better to stick “millionaires and billionaires” on Park Avenue with the bill.

New York owes its sky-high state and local tax burdens largely to the power of organized labor—and not just in the government sector. Unions representing health-care workers (and the nonprofit hospitals that employ them) are a huge obstacle to reining in the state’s bloated Medicaid budget, and the state building trades unions continually push for expansion of the misnamed “prevailing wage” law that drives up the cost of capital construction. In the next legislative session, those unions will have more clout than ever. Topping the list, as usual, will be New York State United Teachers (NYSUT), which has an obvious stake in preventing reductions to education spending, the largest category of the state budget and the driver of local taxes.

NYSUT and other unions provide logistical and financial backbone for a cluster of research and advocacy groups pushing for higher taxes. And labor’s influence isn’t confined to the Democratic Party: Senate Republicans for years nurtured their own cozy relationship with unions representing teachers, police, and municipal employees outside New York City, a big reason for their break with Pataki in the early 2000s. The much-diminished GOP will be counting more than ever on support from police unions, whose lavish contracts are a major factor in high suburban property taxes.

Millions of campaign dollars from NYSUT and other unions provided a counterbalance to a $5 million independent-expenditure campaign, backed by Ronald Lauder, that targeted first-term Senate Democrats for their support of criminal-justice reform measures including bail reform linked to New York’s recent crime wave. Breaking with the rest of public-sector organized labor, a coalition of police unions flanked Lauder’s campaign with endorsements of 15 Republican Senate candidates over members of what the cops termed the “anti-police, pro-criminal Democratic conference.” The New York City PBA alone spent $1 million in a campaign targeting the most vulnerable of Long Island’s first-term Senate Democrats.

Those efforts initially appeared to have yielded fruit for the GOP, based on Election Day results showing that Republicans had big enough leads to flip three Democrat-held seats on Long Island and another in Brooklyn. But Republican victory declarations were premature, failing to reckon with the impact of a new state law that vastly expanded mail-in balloting by adding fear of Covid to the list of permissible excuses for absentee voting. Normally averaging 2 percent of the total, absentees ended up accounting for 20 percent of the votes in most of the state—with Democrats capturing 70 percent or more of those votes in contested Senate districts.

As the absentee ballots were counted in the two weeks following Election Day, Republican Senate candidates saw their leads dwindle and disappear—culminating this week in the confirmed reelection of a first-term Westchester County senator who had faced a vigorous challenge from Rob Astorino, the former county executive and 2014 gubernatorial candidate. (A still-outstanding result in Onondaga County, where ballot-counting was delayed until Nov. 30 due to a Covid outbreak among election workers, could further bolster the Democratic majority to 43 members.)

The Democrats’ record numbers don’t necessarily mean that they’ll have the will or the discipline to unite behind a common agenda. Assembly Speaker Carl Heastie of the Bronx and Senator Majority Leader Andrea Stewart-Cousins, who represents a mixed urban-suburban cluster in lower Westchester County, aren’t nearly as entrenched or powerful as Silver or Bruno were in their heydays. And Cuomo continues to wield considerable executive power through his control of executive agencies and appointments and his constitutional authority to shape the terms of spending through budget appropriations language.

How strongly Cuomo pushes back against the progressive fiscal agenda remains to be seen. After taking office in 2011 as a fiscal centrist, at least by New York standards, he began in his second term to move steadily leftward on a range of fiscal and economic issues, advocating a $15 minimum wage, imposing one of the nation’s most costly zero-emission energy regulations, and, in 2019, baiting Democratic lawmakers into passing a broad statewide expansion of rent regulation.

Rather than fight any pitched budget-cutting battles that he might lose, Cuomo has behaved recently in ways suggesting that he’ll bend further left. His options will become clearer after the January 5 Georgia runoffs decide whether Republicans hold their U.S. Senate majority, which would mean less federal money and a more immediate fiscal crisis in New York.

Immediate fiscal challenges aside, there’s no understating the longer-term significance of New York’s new legislative supermajorities. For the first time in the federal Voting Rights Act era, Democrats will completely control the decennial redrawing of New York’s congressional and legislative district lines—which inevitably will move New York State further along the path to a New York City-style political monoculture.

When a blue wave flipped New York’s Senate two years ago, Senator Brad Hoylman of Manhattan made a prediction that increasingly looks clairvoyant.

“We’re going to be testing the limits of progressive possibilities,” he said. “I hope we look a lot more like California.”


New U.S. laws coming in 2021: Virus aid, minimum wage, legal weed

As Americans ring in 2021, an array of new laws will take effect from coast to coast. Responses to the coronavirus pandemic and police brutality dominated legislative sessions in 2020, leading to scores of new laws that will take effect in the new year.

New COVID and health care laws

Virus-related laws include those offering help to essential workers, boosting unemployment benefits and requiring time off for sick employees. A resolution in Alabama formally encouraged fist-bumping over handshakes.

While legislatures tackled some elements of the coronavirus outbreak this year, most sessions had ended before the current wave of cases, deaths and renewed stay-at-home orders. Lawmakers of both major parties have vowed to make the pandemic response a centerpiece of their 2021 sessions, addressing issues ranging from school reopenings to governors' emergency powers.

The virus also refocused attention on the nation's uneven and expensive heath care system. Tackling issues of coverage and costs were common themes in 2020.

A Washington measure caps the monthly out-of-pocket cost of insulin at $100 until January 1, 2023, and requires the state Health Care Authority to monitor the price of insulin. A new Connecticut law requires pharmacists to dispense a 30-day emergency supply of diabetes-related drugs and devices, with a price cap, for diabetics who have less than a week's supply. Both laws take effect January 1.

"It's unconscionable that anyone should have to limit or go without a common and widely-available life-saving drug on an emergency basis in America in 2021," Connecticut state Senator Derek Slap, a West Hartford Democrat, said in a statement.

Trending News

A much-anticipated Medicaid expansion is coming to Oklahoma in the new year after years of resistance from Republicans in the Legislature and governor's office. Voters narrowly approved a constitutional amendment expanding the federal-state insurance program to an additional estimated 215,000 low-income residents. It takes effect in July.

Lawmakers must determine how to cover the projected $164 million state share during their 2021 session. The cost could be considerably higher, given the number of Oklahomans who have lost their jobs and work-related health insurance because of the pandemic.

Republican Governor Kevin Stitt had urged voters to reject the plan. He said the state would have to "either raise taxes or cut services somewhere else like education, first responders, or roads and bridges" to pay for the expansion.

A new law in Georgia aims to limit consumers from getting stuck with surprise medical bills by requiring insurers in many cases to pay for care by a doctor or at a hospital not within their network of providers. The law protects patients from financial responsibility beyond what they would normally have to pay. Instead, insurers and providers can take disputes to the state insurance commissioner. Minnesota also has what's being called a continuity of care law, going into effect January 1.

Minimum wage increases

Workers in 20 states will get a pay hike on January 1 when the minimum wage increases, thanks to cost-of-living adjustments and other scheduled increases. Later in the year, another four states and Washington, D.C. will raise their baseline pay, which means that low-wage workers in almost half the nation could see higher pay next year.

The pay hikes come as the federal minimum wage, which hasn't seen an increase for more than 11 years, remains mired at $7.25 an hour &mdash the longest span the baseline wage has gone without an increase since it began in 1938. At the same time, workers across the nation are struggling amid an economic recession caused by the coronavirus pandemic, which continues to spread unabated.

Police reform laws

Legislatures also addressed police use of force against Black people and others of color after the killing of George Floyd in Minneapolis led to widespread protests against police brutality. Among other things, new laws will mandate oversight and reporting, create civilian review panels and require more disclosures about problem officers.

States including California, Delaware, Iowa, New York, Oregon and Utah passed bans on police chokeholds. Floyd, who was Black, died after a White officer pressed a knee into his neck for several minutes while being recorded on video, even as Floyd pleaded for air.

New York state Assemblyman Walter T. Mosley noted the hundreds of Black men and women killed at the hands of police between the cries of "I can't breathe" by Eric Garner, who died after being put in a chokehold by New York City police in 2014, and those of Floyd in May.

Mosley, a Brooklyn Democrat who is Black, said the Eric Garner Anti-Chokehold Act was "an important step forward, but it will not be the last."

Despite reforms in some states, the response to Floyd's death was not uniform. Similar use-of-force or disciplinary proposals in several other states failed, and some even moved in the opposite direction.

Georgia created a new crime beginning Jan. 1 defined as bias-motivated intimidation, which would apply to the death or serious bodily injury of police, firefighters and emergency personnel. It also extends to cases involving more than $500 worth of damage to their property because of "actual or perceived employment as a first responder." Violations are punishable by one to five years in prison and a fine of as much as $5,000.

The law was passed by Republicans over the objections of Democrats and civil liberties groups, who said police already have enough protections. Republicans insisted on the law as part of a deal to pass a new hate crimes law in Georgia that drew bipartisan support.

Other notable laws taking effect in the new year

  • Voters in Arizona, Montana, New Jersey and South Dakota approved measures legalizing recreational marijuana. New Jersey's Democratic-led Legislature and Democratic Gov. Phil Murphy are working to set up a legal marketplace and to update laws already on the books to decriminalize marijuana possession.
  • Voters made Oregon the first state to decriminalize the possession of small amounts of street drugs such as cocaine, heroin and methamphetamine. The Oregon drug initiative will allow people arrested with small amounts of hard drugs to avoid going to trial, and possible jail time, by paying a $100 fine and attending an addiction recovery program.
  • Colorado will prohibit landlords from refusing to show, rent or lease housing based on a person's source of income or involvement in the type of contract required to receive public housing assistance. Landlords can still do credit checks, but the act makes it an unfair housing practice unless they're conducted checks for every prospective tenant.
  • New Hampshire will make multiple changes to state laws regarding sexual assault. Starting January 1, the definition of sexual assault will be expanded to include any sexual contact between school employees and students between the ages of 13 and 18. Previously, such contact could be considered consensual and not a crime if the student was 16 or 17. Other legislation taking effect in mid-January increases protections for sexual assault victims and requires colleges and universities to adopt sexual misconduct policies. The bill requires colleges to provide free access to medical and legal support services, anti-retaliation protections, confidential advising services, data on sexual violence, and prevention and response training.
  • Georgia will require an audit starting in 2021 before movies and television productions are awarded the state's generous tax credit, which has allowed the highest subsidies of any state. The credit, which rebates up to 30% of a production's value, cost nearly $900 million in foregone tax revenue in 2019 as movie and TV production boomed in Georgia. Examinations were highly critical of the tax credit, finding some companies that received tax credits didn't earn them.
    companies based there to have at least one board director by the end of 2021 who is a racial or sexual minority, with larger numbers required by 2022. Companies with 100 or more employees also must start sending information on employees' race, ethnicity and gender to the state.
  • Connecticut employers must begin taking deductions from their employees' paychecks for a new paid family and medical leave program, under a state law passed in 2019. The state's estimated 100,000 businesses will be responsible for withholding half a percent from worker wages. Qualified employees can begin receiving benefits on January 1, 2022. Massachusetts also begins a new paid family medical leave program in the new year. It offers a 12-week benefit in most cases, extending to 26 weeks for those caring for a military member undergoing treatment.
  • Oklahoma will extend a property tax exemption for religious institutions to include property owned by a church if it conducts instruction of children from pre-K through grade 12.

Aimee Picchi contributed to this report.

First published on December 30, 2020 / 12:04 PM

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