December 22, 2006

The cost of minimum wage increase

Some small businesses say prices will go up, workers will be cut


Bob Ellis/staff photographer   
Waitress Chrisy Holden rings up a check at Gracie Rachels diner in Polkville Thursday afternoon. The diner and other businesses statewide will be forced to raise the minimum wage they pay from $6.75 to $7.15 per hour on Jan. 1.

Staff Reporter
New York’s minimum wage will be going up from $6.75 an hour to $7.15 an hour on Jan. 1, and local small business owners say they are concerned about how they’ll deal with the change in a state where it’s already difficult for them to do business.
Employees at larger businesses, on the other hand, say they are less worried about the change, as they have more flexibility in their budgeting.
Angelo Maniccia, owner of the Red Dragon at 222 Tompkins St., said a handful of the restaurant’s 10 employees will see their salaries increase to $7.15 an hour.
Maniccia said it is a little bit ridiculous that restaurants will have to pay dishwashers so much money for such a straightforward task.
“You know it’s quite a wage to pay somebody to wash pots and pans,” he said.
The restaurant will have to shoulder the burden by hiring fewer employees and asking employees to pick up additional duties, he said.
The business will also likely raise some prices as a result of the change. That’s really a pity in a city such as Cortland where many people don’t have a lot of disposable income, he said.
“We’re all trying to make a profit and everything, and we have to pass it on to the consumer,” he said. “As a result, customers will elect to stay home eventually.”
Laura Lansdowne, who owns Gracie Rachels at 3821 Route 11 in Polkville, said she too might have to raise prices.
Last year the diner had to raise its prices in response to the first stage of the minimum raise increase, she said.
The minimum wage in New York State increased from $5.15 to $6 on Jan. 1, 2005, and from $6 to $6.75 on Jan. 1. The state Legislature in December 2004 overrode a veto by Gov. George Pataki to raise the minimum wage over a three-year period.
Lansdowne said the diner may also have to eventually lose an employee. It already reduced its workforce from five employees to three employees, she said.
Tim Terwilliger, owner of Mando Books at 33 Main St., said he won’t only have to raise the pay of his seasonal help, which totals about 14 people in Cortland and 16 in Binghamton during this college break, but he’ll also have to raise the pay of people who work above minimum wage out of fairness.
“I’m going to have to look at my whole pay scale — no doubt about it,” he said.
Terwilliger said he will not cut down on the stores’ employees as a result of the minimum wage hike. Instead, he will absorb the increase “out of pocket,” he said.
He also co-owns the Red Jug Pub at 31 Central Ave., and will have to pay those workers higher salaries, too, he said.
Brent Riley, owner of Graph-Tex at 24 Court St. and 46 Elm St., said no one at Graph-Tex makes minimum wage, but like Terwilliger, he will have to bump up salaries that are slightly above minimum wage.
Those consist of about six entry level and part-time workers, he said.
Riley said he is concerned about the burden the new law will place on his business and other businesses. New York is already a hard to place to run a business, he said; it has high taxes, high insurance costs and high utility costs.
“It’s just going to be harder and harder to do business in New York state,” he said.
Michelle Bracklin, assistant executive director of Auxiliary Services Corporation (ASC), a SUNY Cortland-based nonprofit organization that employs 350 students, said the organization is ready for the minimum wage increase.
“We’ve known about this increase for a number years, and in our budget planning purposes we’ve budgeted accordingly,” she said.
Budgeting includes raising prices of products and spending less money on insurance and paper supplies, she said.
Tom Quinn, spokesman for Cortland Regional Medical Center, said the hospital increased the base rates of its lowest paid employees — food service workers — earlier this year.
They are now paid more than $7.15 an hour, so the minimum wage increase won’t affect them, he said.
“So this was kind of being more proactive to it,” Quinn said.
Doug Boyce, regional director of the Small Business Development Center at Binghamton University, said he understands small businesses’ concerns about the minimum wage increase, which are especially relevant for businesses that are struggling to get by.
While it is clear small businesses will be hurt by the change, it is not a given that minimum wage employees will significantly benefit from their higher salaries in the long run, he said.
Any benefit from their higher salaries will soon be offset by stores raising their prices to compensate for paying their employees more money, he added.
“It’s a trickle down effect,” he said. “People are paid a little more, and have more disposable income, but prices will still follow.”
Boyce said some very large businesses, such as Wal-Mart, should benefit from the minimum wage increase. Even though they will have to pay many of their employees more money, they will benefit from smaller businesses raising their prices as a result of the minimum wage increase.
The prices of the other businesses will be too high for some people, but Wal-Mart will still be affordable.
“They’re the people who are going to benefit because people will continue to shop at Wal-Mart,” Boyce said.
But some small business owners, such as Tom Fox, who owns Uncle Tom’s Family Grocery and Deli in Preble, say with prices already rising, raising the minimum wage is necessary.
“Why keep someone on the poverty level?” he asked. “I don’t agree everyone needs to make $15 an hour, but golly gee.”



Legislature OKs new health building

Staff Reporter

A proposal to build a 15,300-square-foot county public health facility on south Main Street nearly got off to a fatal false start Thursday, as legislators from both political parties questioned the way the project was rolled out and the impact it might have on surrounding neighborhoods.
Ultimately, the Legislature voted 13-6 in favor of purchasing $894,000 worth of property for the project — a 2/3 majority was required to pass — but not before legislators both for and against the purchase called three separate recesses and went into executive session in an effort to whip up votes.
The county is looking to build the facility, which would include the Mental Health Department and the Public Health Department, on 2.46-acres of land on south Main Street, replacing the currently vacant Moose Lodge at 157 Main St.
The total project could cost approximately $5.5 million, according to County Administrator Scott Schrader, about $3 million of which would come from the county’s tobacco settlement money, and the rest of which would need to be bonded for.
Had the Legislature voted against the property acquisition, or had it tabled the issue until next month, the deal essentially would have been dead, Schrader said, because the county’s options on the nine parcels it will acquire expire today.
County officials announced the proposed project at a news conference Wednesday, and the fact that some legislators didn’t hear about the project until then became an issue Thursday night, as did the fact that residents living near the site also were in the dark.
“I literally found out about this today at work when somebody asked if my house was going to be demolished too,” said Pete Snell, who lives at 15 William St., and whose property would border the proposed parking lot for the facility.
Snell and his neighbor Kathy Wilcox, who lives at 62 Church St., spoke at the meeting, saying they weren’t opposed to the location of the building, but they were concerned about the location of the parking lot and how it would impact their properties.
“Those properties on William, Randall, Church and Cedar streets — we’ve put a lot of money into our homes, they’ve become very coveted neighborhoods, and I don’t want a parking lot in my back yard,” Wilcox said.
Wilcox and Snell’s appeals sparked the first lengthy recess of the night, and appeared to also incite the ire of legislators upset with the short notice the legislature and the community had to respond to the proposed project.
“The public is just finding about it tonight, so I’m not going to support it at this point,” Mike McKee (R-Cincinnatus, Freetown, Taylor and Willet) said at the meeting.
Minority Leader Danny Ross (R-Cortlandville) agreed.
“I think ultimately it’s probably a good project, but I don’t like not informing all the legislators from the beginning,” Ross said. “I think if there had been more communication we could’ve talked about changing the layout and looked at having parking someplace else, and we wouldn’t have had all these problems.”
Sandy Price (D-Harford and Virgil) voted in favor of the property purchase, but not before expressing similar concerns.
“I think the concept is excellent. I think consolidating those services in one place is a great idea, and I think it’s a good location,” Price said.
Still, Price struggled with her vote, she said.
“But the short notice — considering the cost of the project and the worries of the public — really set me back,” she said. “We didn’t have an opportunity to touch base with our town boards and the key people in our community, and with a project this big, I think we should have time to do that.”



Legislator questions executive session

Staff Reporter

While a number of legislators and at least two community members questioned the county’s lack of openness prior to the announcement of a proposed $5.5 million public health facility, at least one legislator was questioning the body’s openness during Thursday’s meeting.
Newell Willcox (R-Homer) was visibly upset after the meeting because of an executive session, during which the public is asked to leave the room, which he felt was unnecessary.
“There was nothing said that couldn’t have been said in public,” said Willcox, who, with Larry Cornell (R-Marathon and Lapeer), voted against going into executive session. “I believe in full transparency and what was said was nothing more than a pep talk to sway some votes.”
County Attorney Ric Van Donsel, who said at the meeting that he needed to discuss legal implications with the Legislature during the session, declined comment on what was said, but added this morning that he felt the session was appropriate.
The session was aimed at getting Van Donsel’s opinion on the voting strength requirements for a potential vote, County Administrator Scott Schrader said, and to discuss the impact of turning the purchase options for the properties down or deferring a vote until next month.
“It’s never a good idea to negotiate property acquisitions in public,” Schrader said. “All it does, frankly, is cost you money.”
Closing the session’s door to the public to receive a legal opinion is legal, although it wouldn’t fall under the purview of “executive session,” said Bob Freeman, director of the New York State Committee on Open Government,
“If the purpose of the session was to enable the attorney to give legal advice to the county Legislature, that would be an exemption from open meetings law,” Freeman said.
Still, Willcox argued that there was little legal advice given during the session.
“Basically we were told, ‘If you vote against this tonight, then in any further negotiation, the prices will go up,’” Willcox said. “But we already knew that, we knew the prices, everyone did — they were printed on the front page of the paper.”
Willcox’s characterization of the closed session caused Freeman to question his initial assessment.
“If it was advice anybody would’ve given, it doesn’t seem like there was a basis for closing the doors,” Freeman said.





Dryden teacher resigns

Staff Reporter

The Dryden Board of Education Thursday accepted the resignation of high school physical education teacher Joseph Truax, who was charged with public lewdness on Dec. 15.
The board met in a special session.
Superintendent of Dryden Schools Mark Crawford said he talked on Monday to Truax, 36, of 2390 South Cortland Virgil Road, Cortland, and he indicated he would resign. Truax submitted his resignation on Wednesday. His resignation is effective Jan. 8, 2007.
SUNY Cortland police arrested Truax after a female student saw him fondling himself while driving around the SUNY Cortland campus, police said. Public lewdness is a misdemeanor.
Police said Truax was operating a 2004 Pontiac Aztec on Prospect Terrace around 11 a.m. near SUNY Cortland’s Memorial Library when the student saw him.
Crawford said students were concerned about Truax. “They are concerned about him and his family.”
Crawford said that Truax, who has worked in the Dryden School District for five years, could lose his career in education.
Truax is scheduled to appear at 9 a.m. Jan. 5 in City Court.





Election heads still upset over pay

Staff Reporter

The Legislature opted Thursday to take a wait-and-see approach regarding a potential legal challenge from the two county election commissioners regarding their salaries.
The Legislature voted unanimously to remove the election commissioner positions from the county’s management compensation plan, which awards additional salary based on tenure, and to set the commissioners’ salary at $26,384.48 annually, with no option for longevity pay.
Republican Commissioner Bob Howe and Democratic Commissioner Bill Wood had requested in November that their salaries be equalized to put the county in line with state election law. While the county’s decision to even the commissioners’ pay would appear to solve the problem, both commissioners may also have a legal objection.
Wood could potentially challenge the county and request back pay that would equalize his 2006 salary with Howe’s, who, with 10 more years experience, was making $29,967 annually, to Wood’s $25,616 in his first year as commissioner.
Meanwhile, Howe, who is closing out the first year of a two-year term, could potentially mount a challenge on the grounds that his salary has been illegally reduced mid-term.
Ralph Mohr, an election commissioner from Erie County, and a former chairman of the state Election Commissioners’ Association, attended Thursday’s meeting and spoke on the local commissioners’ behalf.
“While we understand what you’re attempting to do … the fact that you’re diminishing the salary of an election commissioner is not proper,” Mohr said.
Still, the Legislature was not convinced by Mohr’s plea.
“It doesn’t look like he swayed anyone,” said Danny Ross (R-Cortlandville). “They wanted equal pay and that’s exactly what we’re giving them.”