New report: Old laws and pesky litigation to blame for much of NY's 'affordability crisis'

Hochul tells a Black congregation not to spend their 'inflation rebate checks' at the liquor store; Stefanik pounces, calling out the governor for 'racial insensitivity.'

Good afternoon — it’s Tuesday and Teddy Bear Day.

In today’s CapCon:

• A new report blames outdated laws and policies for New Yorkers paying the highest insurance premiums in the country.

• Hochul tells the congregation of a predominantly Black Baptist church in Buffalo to use inflation rebate checks to buy food for kids, not to purchase liquor.

• And if Cuomo could just get Adams and Sliwa to drop out, the race for NYC mayor would get much tighter.

Names in today’s CapCon: Elise Stefanik, Curtis Sliwa, Andrew M. Cuomo, Eric Adams, Zohran Mamdani, Kathy Hochul, Kathryn Wylde, Donald J. Trump

CapCon note: Dan Clark is off this week for a well-deserved vacation. Brendan J. Lyons and the Capitol Bureau team are keeping the newsletter churning!

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New Yorkers pay insurance premiums that average 15 percent higher than rest of nation. (Getty Images)

A new report from The Partnership for New York City examines why it costs so much to live in New York

The Partnership for New York City, which represents the city’s business leaders and largest employers, on Tuesday released a report that asserts outdated laws and policies, as well as predatory litigation, are behind what’s been dubbed the state’s “affordability crisis.”

So how much more are New Yorkers paying for certain insurance? They say health insurance premiums are 12% higher than the rest of the country, while auto coverage is 52% more. Overall insurance premiums are 15% higher in New York.

So who or what is to blame?

• First up, the report says, is a section of New York Labor Law known as the Scaffold Law. It’s a statute from 1885 that has essentially pitted construction workers against their employers. It was intended to make job sites safer, but business interests and many GOP lawmakers say claims filed under the law can add up to 7% in additional insurance costs for new construction. As Dan Clark recently reported, a coalition of business and civic groups are backing a Republican-sponsored congressional bill to repeal the antiquated statute.

• The report also takes aim at medical malpractice payouts that it says are significantly higher in New York than the rest of the nation. It finds that is driving up medical costs as well as employer-sponsored health insurance premiums that are 12% higher in New York than the national average (as of 2023). Medical malpractice payouts by New York City’s municipal health system cost taxpayers $963 million in settlements and judgments over the past decade.

• New York is one of 12 states with no-fault auto insurance, which the report said accounted for 93% of health care fraud and 75% of all fraud reported to the state’s insurance regulator last year. Consider that up to 70% of the claims processed by New York City’s largest taxi and for-hire vehicle insurer are found to be fraudulent. The fallout? Higher auto insurance premiums.

• Restaurants and other retail businesses are targets for massive amounts of litigation that seeks big settlements and judgments, including numerous cases filed across New York each year under the Americans with Disabilities Act. The report noted those public accommodation lawsuits are so common that one person “filed 113 lawsuits since 2018.” New York also sees lots of class-action lawsuits targeting food and consumer packaged goods companies - accounting for about a third of those cases filed nationally.

So what can be done? The report makes some suggestions: