Metro

Minimum-wage increase combined with teen employment tax credit in New York state budget deal

ALBANY — Boosting New York’s minimum wage to $9, one of the highest rates in the nation, won’t just cost businesses millions — taxpayers will be on the hook for $45 million a year.

That’s the cost of a tax credit for companies that keep or hire 16-to-19-year-old students at the new minimum wage, according to budget bills being passed in Albany this week.

Gov. Cuomo conceded this week that the credit was a quid pro quo for Republican legislative support to increase New York’s $7.25 minimum wage to $8 next year, $8.75 in 2015 and $9 in 2016.

“The minimum wage/teen tax credit was a compromise we believed was necessary to protect businesses,” said Scott Reif, a spokesman for Senate Republican Leader Dean Skelos of Long Island, who had initially sought a sub-minimum “training wage” for younger workers.

Senate Democrats and others said the credit will prove counterproductive — and Sen. Michael Gianaris (D-Queens) called it a “disgrace.”

He said companies will fire or overlook older workers and withhold raises to worthy younger workers, all to get the tax credit.

“We’re providing state subsidies that will result in people losing job opportunities and ensuring teenagers are stuck at the minimum wage,” he said.

“It defeats the purpose of raising the minimum wage when we’re actually encouraging job losses and low wages.”

Provisions prohibiting companies from firing workers to take advantage of the credit are unenforceable, Gianaris maintained.

Sen. José Peralta (D-Queens) said during the budget debate this week that the state is basically paying Walmart to fire people.

The taxpayer cost kicks in during 2015 at $23 million and grows to $45 million by 2017 under the plan, which could last up to five years, according to Cuomo’s Budget Division.

Spokesman Morris Peters estimated that 75,000 student teens work at the minimum wage in New York.

He said the credit “affords businesses time to adjust to the new minimum wage.”

And he noted that if the federal minimum wage increases, the subsidy will be “reduced accordingly.”

Even business leaders didn’t advocate for the credit.

“It’s certainly not the approach we had asked for,” said Kenneth Pokalsky of the Business Council of New York State.

The minimum-wage hike and tax credit are part of the new $143 billion state budget for the fiscal year that begins Monday.

The Assembly finished voting on the budget just before midnight last night, making it the third year in a row that a state budget was approved by the April 1 deadline.

The budget also redirects $2 million from speeding-ticket surcharges back to their original purpose, spinal-cord research, a partial win for proponents.

The state began grabbing the $8.5 million generated annually from the surcharges for budget balancing in 2010, despite a 1998 law requiring that the money go to research, as The Post reported last month.

ekriss@nypost.com