Beginning this year, Cub Care in Vestal started paying its minimum wage employees 7 dollars and 15 cents.
The hike was part of a 2004 state law.
Cub Care raised rates and cut back on staff.
"It has a ripple effect throughout the entire program," says Deborah Fitzgerald of Cub Care.
Democrats in New York State Assembly want to raise the minimum wage again, up to 8 dollars and 25 cents by 2010.
Executive Director Deborah Fitzgerald says Cub Care would be left no choice but to increase its tuition.
"Although our employees are worth every penny that we're spending on them, our main focus is trying to keep our child care costs very affordable for parents," says Fitzgerald.
Pre-school teacher Leslie Shaver makes just a little more than a minimum wage.
"It's a good job to have but sometimes I know a lot of people that I've worked with left because they don't make enough money here," says Shaver.
State Senator Thomas Libous says New York just got through the latest minimum wage hike.
"I don't think the Senate, at least at this time, has any interest in looking at it. We did it. The last phase went in this past January. So, no, I don't think it's necessary at this point," says Libous.
Assembly Speaker Sheldon Silver thinks it is necessary so workers can keep up with the cost of living.
The Assembly bill would not end the minimum wage increase at 8.25.
After that, it calls for yearly adjustments based on inflation.