NY businesses pressured by high costs. Could Albany help?

Little Star Pastry owner Rebecca Turnbull said child care costs for her family, health care costs as a small business owner are her biggest concerns.

Many business owners in New York say the cost of doing business in the state is "barely affordable or not affordable at all" according to a recently released survey by The Business Council of New York State.

In a survey sent to more than 1,400 Business Council members between November 2025 and February 2026, 53% of respondents rated the overall cost of doing business in New York as "barely affordable" and nearly three-quarters of respondents say the state's economic environment has hurt their business over the past three years.

"These findings emphasize the urgent need for policy solutions that address increased cost drivers, improve economic predictability and restore New York's reputation as a place where businesses can grow and invest for the long term," the study says.

Here's what to know about how business-oriented advocacy groups such as The Business Council are working to incite change.

What burdens New York businesses the most?

Affordability continues to be a main concern for businesses statewide, the survey states.

"The catch word that everyone is using in politics these days is affordability and how you define affordability kind of depends on where you sit," Heather Mulligan, The Business Council president and CEO told Spectrum News on Feb. 1. "The devil is in the details as to how we define affordability and thought needs to go into the downstream consequences of things that are intended to help people..."

For small businesses, Mulligan says wage increases aren't affordable for the business owner or their customers, which is reflected further in The Business Council's study. Labor and wages costs have increased the most for companies, according to 36% of respondents. Following closely behind are health-care costs at 28% and taxes at 14%.

These rising costs have led to increased prices, delayed hiring and even the consideration of relocation or expansion outside of New York, according to the study. Almost 60% of respondents also say they're uncertain about their ability to grow their business in the state over the next few years.

This sentiment is echoed in a newly-released report by the National Federation of Independent Business, which revealed small business owners in New York are less optimistic about the system than business owners in the rest of the country, and more owners reported uncertainty about whether it is a good time to expand their business since December.

What legislation could help ease the burden on New York businesses?

A report commissioned by an affiliate of The Business Council -- the Public Policy Institute of New York State -- called for improvements to address some of these issues last year, including changing regulations and taking a closer look at the state's energy policy.

In Gov. Kathy Hochul's 2026 State of the State address, she pledged to tackle some of these concerns, which leaders of The Business Council say will help "promote and support business investment and job growth in communities across New York State."

Here's what statewide changes could help address affordability issues impacting New York businesses, according to The Business Council.

How has Hochul helped small businesses in the past year?

Hochul's latest efforts to assist the state's small businesses are a continuation of several changes the governor made as part of her fiscal year 2026 budget.

In May 2025, Hochul announced three new statewide initiatives:

* Expanded the state's Linked Deposit Program, which helps small businesses borrow money at more affordable rates, by nearly doubling the funding available for linked deposits from $560 million to $1.1 billion through the launch of the Low Interest Capital program.

* Increased the discretionary purchasing threshold from $750,000 to $1.5 million when state agencies buy from New York State-certified Minority- and Women-owned Business Enterprises.

* Modernized the Empire State Jobs Retention Program, which helps retain businesses impacted by natural disasters, to allow small businesses to receive financial incentives through the program, streamline eligibility criteria and focus assistance on the immediate aftermath of natural disasters.

Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers' taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at [email protected].