Upstate NY's Priorities for State Budget

Dan Clark: Last week about Governor Hochul’s proposal to raise taxes on cigarettes and ban menthol-flavored tobacco. Just a quick recap that under that proposal, the tax on a pack of cigarettes would go up a dollar to $5.35.

Last week we told you about how convenience stores are against that because it would cut into their revenue. This week we spoke to supporters of Hochul’s proposal. Like Hochul, they say that raising the cigarette tax and banning menthol will get more people to stop smoking. That has worked before in New York.

Two decades ago, New York City increased the local tax on cigarettes. At the time, the tax had gone from $0.08 per pack to $1.50. At the same time, the state also banned smoking in the workplace. By 2004, according to the US CDC, nearly 200,000 people in New York City had stopped smoking, and according to a survey done by the city Health Department, the higher tax was a big part of that.

Nearly half of those asked, about 45%, said it was the higher tax that drove them to quit or at least try. Supporters say Hochul’s proposal would do the same and reverse decades of targeting toward black New Yorkers.

Shanequa Charles is one of those supporters. She lost her mother to smoking related illness.

Shanequa Charles: We know that it's intentional, we know that you are targeting us, we know that you don't mean us any good. So, this is why on this day, here on this property, and this location in Albany, we are saying that we're not going to take it anymore. We hope that you will have the courage to stand up.

DC: More on that in the coming weeks as the state budget comes together.

Dan Clark: We told you a lot about what matters to New York City in this year's state budget. And that's because some of the big controversial issues this year affect New York City more than the rest of the state, like how Governor Hochul and lawmakers are working on new funding for the MTA or how charter schools want to expand in New York City. Those issues matter upstate as well, just in different ways.

But as longtime Capitol watchers know, when New York City issues come up, they have a habit of dominating the conversation, and sometimes that can leave upstaters feeling shortchanged. So, this week, we wanted to speak to someone about what matters to upstaters in this year's state budget.

For that, we turned to Justin Wilcox, who leads Upstate United, an advocacy group for issues upstate.

Justin, thank you so much for being here.

Justin Wilcox: Well, it's my pleasure. Thank you for having me.

DC: I want to talk to you about what upstaters want in this year's legislative session. I think that you have your finger on the pulse of what upstaters are looking for this year more than a lot of people. Tell me, what are they looking for?

Yeah, you know what we've seen in the Siena poll is upstaters really care about the cost of living, and frankly the same for our businesses in upstate New York, it's the cost of doing business in the state. So, the concerns that I'm hearing about from taxpayers, residents, businesses, employees and employers, it's really the same. It's the cost of living in New York and the cost of doing business in New York.

DC: You know, one issue that New Yorkers are facing right now with inflation is kind of this issue of where wages are. The governor has a proposal in her state of the state and the state budget this year to tie the minimum wage to inflation moving forward, which means that basically as inflation goes up, the minimum wage would go up with it.

What do you think about that proposal? How would it affect upstaters?

JW: Look, let me just say the proposed increased minimum wage, which is really close to $15 across the state, we're still a little bit behind in upstate New York, I think we're like $14.25 while the rest of the state is at $15. At a time when we are facing inflation, the Federal Reserve, to combat that is trying to take money out of the economy and what we're doing in New York to combat inflation, it’s negative effect is to add money into the economy, to put more money in people's hands and to do that through employers who are going to be forced to increase their prices. So the problem is this.

It's not a good policy tool to even address what it is that policymakers say they're addressing. So often we hear that we need to use the minimum wage as a policy tool to address poverty. Unfortunately, the minimum wage is a very blunt tool to do that because it's oftentimes going into households that live

well above poverty rate. There's a much better policy tool that most economists would say does work to fight inflation. I'm sorry not inflation, fight poverty and not and not add to inflation, and that's the earned income tax credit.

That’s going to go directly into the hands of those who need it. We know that's going to go to certain households that have certain levels of income. So, it's a precise tool to address poverty.

DC: So, you think that would be more effective than raising the minimum wage and tying it to inflation, just having a tax credit instead? Would that be enough, you think, to kind of make people whole, or do you like to see more than that?

JW: Look, in terms of making people whole, that's got to be really difficult because again, there's inflationary pressures at play. But if you're really trying to address poverty, you should probably try to get more money into the hands of those who are in poverty, not just more money into the hands of people currently making minimum wage. They're not the same.

I also have to point out in talking to a lot of not-for-profits, this is going to actually squeeze them as well. A lot of the folks that work for not-for-profit agencies do make around the minimum wage, and what's going to happen is these not-for-profits are going to be forced to constrain their costs in one way or another, either by laying off employees or making folks part time.

DC: Before we were recording this interview, we were talking about manufacturers in New York and kind of the different industries that have left New York and maybe are not able to grow here. We were we were talking before about individuals in terms of the minimum wage, a little bit about businesses. When we talk about those businesses that don't seem to be able to make a lot of progress here, what do you think the state needs to do about that?

JW: Well, look, I would like to put this conversation in some context. Being from Rochester, New York, I have seen Kodak, Eastman Kodak go from 62,000 employees in the Rochester area to 1300. That's a significant change. There's a lot of factors that play into that, it's not simply just being here in New York that led to that kind of decrease, but it's sort of the environment that we're facing. It's globalization, it's the fact that a lot of our companies are facing competitors with lower costs.

So, New York businesses are facing a ton of cost increases, whether it's unemployment insurance, whether it's minimum wage, or whether we're talking about some of the impacts of the CLCPA, the Climate Leadership Community Protection Act. We just recently saw the PSC, Public Service Commission, approve in the last couple of weeks a huge increase on people's bills.

You're going to see increases between, I believe, anywhere from 3 to 16% in upstate New York. The 16% is really targeted at industrial users of energy, and that's going to make it really tough for folks and for businesses to pay those bills.

What we're likely to see as a result of that increased pressure on the business is those prices are going to get passed along to consumers. It's the cumulative effect of all of these things that is really difficult for New Yorkers.

DC: In terms of the PSC vote when we're looking at utilities and things like that, do you think the burden in helping consumers and ratepayers, do you think that lies with the PSC or is it with these utility companies? I mean, as I'm looking at my National Grid bill, I just see it keep on going up and up and up and genuinely, I could not tell you if that is a problem with National Grid or the PSC.

JW: That's a great question, Dan, and I'm glad you asked it because the fact is the PSC and utilities had no choice but to address the transmission lines and the need to upgrade transmission in order to comply with the CLCPA. So, what we have is the PSC acting as a de facto taxing authority and it leads people to get upset with the PSC and get upset with the utilities when in fact this is 100% the result of the legislature and their unwillingness to take responsibility for their actions.

DC: It's really interesting, and I'm sure it's an issue that a lot of New Yorkers are interested in, especially in the next couple of years as we see the state's Climate Action Council's scoping plan start to take effect.

Justin Wilcox from Upstate United, thank you so much.

JW: Thank you.

DC: There are plenty of other issues for upstaters to look out for in the coming weeks as well. Issues like education aid and infrastructure will also be part of the state budget. More on that over the next few weeks.