NYSAFAH New York State Association for Affordable Housing

IDA prevailing-wage bill dies in Albany

By Keith Goldberg
Times Herald-Record
Published: 06/21/10

A state bill regulating how industrial development agencies do business — including a requirement that workers on IDA projects be paid prevailing wages — died last week in the Legislature for the second straight year. And a local co-sponsor of the bill isn't counting on another resurrection anytime soon.

"I don't see it happening," said Assemblywoman Annie Rabbitt, R-C-Greenwood Lake. "There's just too much turmoil and groups of people trying to kill it."

The bill — which also mandated groups such as local governments, school districts, unions and environmental groups to serve on IDA boards — was anathema to business groups and local IDAs themselves.

"The more regulations, the more standards put on incentive programs, the more difficult it makes to compete," said Maureen Halahan, president of the Orange County Partnership. "We're (New York) already in trouble."

The Ulster County IDA, which had a prevailing-wage policy before scrapping it last year, was one of several groups pushing hard to kill the bill.

"During the 20 months this policy was in effect, the Ulster County IDA did not close a single project that was subject to the 'prevailing wage' requirement," Ulster County IDA chairman David O'Halloran wrote in a letter to Assembly Speaker Sheldon Silver last week. "The reason, as we heard from many businesses and nonprofits, was that the added cost would have made the projects noncompetitive."

They got their wish. Assemblyman Sam Hoyt, D-Buffalo, the bill's sponsor, pulled it before the local government committee could even vote on it, effectively killing it for the year.

Rabbitt, the bill's only Republican co-sponsor, would have voted yes, even though the idea of mandates made her uncomfortable. She liked the idea of more oversight when awarding tax breaks. And as long as the state tax burden remains onerous, in her view, prevailing wages are necessary.

"We're taxed out of here, but how is that fair to the worker?" Rabbitt said. "It's not the average taxpayer's problem that you can't afford to pay workers to live here."

NY Daily News
Editorial: Jobbing New Yorkers: Living-wage scheme will cost good jobs, not make them
November 30, 2009
There may be no place on the planet that generates more noble-sounding but awful ideas than Albany. In the latest, Gov. Paterson and the Legislature would attempt to repeal the laws of economics. At the behest of politically powerful SEIU 32BJ, the union for building service workers, the officials are considering imposing wage mandates on projects that get economic development incentives to create jobs. To qualify for benefits such as low-interest loans and tax breaks, construction firms would be obliged to pay based on local union contracts - which generally call for higher wages than nonunion workers make. Similarly, building management companies would have to provide doormen, custodians and other workers with prevailing wages based on the 32BJ contract. Finally, all employers that occupy the building would have to pay at least $19.20 an hour in New York City - almost three times the normal minimum wage. Despite all of Albany's economic development assistance, the sad fact is that New York has been in a long, desperate struggle to create jobs. Increasing the costs of each slot by legislative strongarm would worsen the challenge, if not kill new projects before they started. Two words to Paterson, Assembly Speaker Sheldon Silver and Senate Democratic conference leader John Sampson: Forget it.

NY Post:
E ditorial: Killing Jobs To Court Labor
Last Updated: 9:34 AM, November 28, 2009
Posted: 12:55 AM, November 28, 2009
Gov. Paterson's poll ratings may be poor, but that's no reason for him to try to buy union support with a bill that would destroy jobs. Alas, that seems to be his thinking in promoting legislation to force developers and landlords at state-assisted projects to pay workers, essentially, union scale. Salaries at such projects would have to be in line with "prevailing wages" -- i.e., union wages. In New York City, that would be a hefty $19.20 an hour -- nearly three times the $7.25 minimum wage. And, again, the bill would cover not just construction workers on a project but also a landlord's workers far into the future -- including "guards, doormen, building cleaners, porters, handymen, janitors, groundskeepers, elevator operators and collectors of garbage." Leave no worker behind, it seems, in terms of pay -- even if it means leaving far too many of them behind when it comes to jobs. That's right: In one fell swoop, the bill would make many projects uneconomical -- even with the state assistance (which usually covers just a small portion of the costs, anyway). Thus, projects -- like those planned for Manhattan's Hudson Yards and Kennedy Airport's JetBlue terminal -- would likely not get done. At those sites, it'll be "good-bye, jobs." How ironic: The program that provides the assistance -- tax-exempt financing, for example, through a quasi-public Industrial Development Agency -- is meant to promote development and create jobs. But Paterson's plan would make those developments less affordable for developers -- and strangle job growth. Of course, unions prefer higher wages to more work; they've long pushed for such a prevailing-wage bill. Paterson was no doubt looking to throw organized labor a bone, in the hope of winning its support -- and never mind the lost jobs. The good news? He now seems to be backpedaling: He's reportedly called the plan merely "a working draft" and admitted it would hurt economically hard-hit areas, like upstate New York. Better he scrap the idea entirely. Meanwhile, though, the City Council is up to similar mischief: It's considering a union demand to force a developer at a proposed Bronx project to pay workers an above-market "living wage" rate -- estimated at more than $10 an hour. The developer, Related Cos., wants to build a mall in the old Kingsbridge Armory, creating 1,000 construction jobs, plus 1,200 permanent jobs. Forget that if the council's wage provision is forced on Related. The project -- and rent for subsequent tenants -- would simply become too expensive. As Related's Jesse Masyr testified, "Without tenants, there is no financing. Without financing, there is no project and without the project, there are no jobs." Or don't council members care? The same holds statewide: New York's economy is bad enough; no need for the gov to kill more jobs -- no matter how much union support it wins him.

Newsday:
EDITORIAL: Albany should overhaul IDAs Newsday (subscription) - ‎
Nov 27, 2009‎ / opinion EDITORIAL:
November 27, 2009
At a time of disturbing 9 percent unemployment in New York, state government should be using every job-creation tool it has. Even better if the tools don't cost anything. But right now, the legislature can't authorize $2 billion-plus in low-interest bank loans pending for civic projects. The financing is being held hostage to a dispute between business and labor over industrial development agency reform. Gov. David A. Paterson recently released a "discussion draft" outlining a union-friendly deal. The plan would require businesses to pay the prevailing wage, $16.98 an hour on Long Island, if they receive IDA help. This wage, however, would apply not only to construction, where at least there is a precedent from other government projects, like sports stadiums. It would also obligate many future tenants of the new buildings. Unions understandably want the tenants to pay a living wage. But these conditions threaten to thwart too many projects. The legislature's first priority should be to overhaul the underperforming IDA system. Lawmakers should add tougher reporting requirements and a "clawback" provision to retrieve tax dollars when businesses fail to create promised jobs. And the 115 IDAs should be consolidated by region. Let's justify whether the jobs created merit these tax breaks before worrying about how well the jobs pay.

Rochester Perspective D & C-
Labor, civic groups push for IDA reform
-Cara Matthews •
November 30, 2009 • 11:14 am
Good-government and labor advocates are asking lawmakers to pass legislation to reform the Industrial Development Agency system along with a budget to close the state’s $3.2 billion mid-year deficit. The groups want to increase accountability, introduce business standards and guarantee higher wages. “IDAs are consistently failing to deliver on the good jobs and strong economic development our communities need,” Allison Duwe, executive director of the Coalition for Economic Justice, said in a statement. “Reforming IDAs now would be fiscally sound and aid in our long-term economic recovery.” Legislation to do this has passed the Democrat-controlled Assembly for the past three years. It has made it through committeed in the Democrat-led Senate but not onto the floor for a vote. The business community has opposed the legislation. There are 115 IDAs in the state. “This reform is about making sure we’re investing in creating good, middle-class jobs, and in development that’s done in a way that encourages smart and sustainable growth,” said Sen. Antoine Thompson, D-Buffalo, the legislation’s Senate sponsor

Albany Busines Review:
Local developers rail at Paterson’s wage proposal
Business Review November 27, 2009
Gov. David Paterson and state legislators could soon saddle local development agencies with wage mandates, which businesses fear will kill construction projects.
The proposal fuels the political battle between underfunded business groups and rich labor unions with legions of members. Paterson and state legislators have already taken other actions this year that would impose above-market-rate wages on select projects receiving public money…Evening Observer: County IDA opposes governor's proposal Evening Observer - Nicholas L. Dean - ‎Nov 28, 2009‎
Governor David Paterson's proposal to reform projects financed by industrial development agencies is a disastrous idea, according to Bill Daly, Chautauqua County IDA director….

BUFFALO’S BUSINESS
IDA reform may spell trouble for local firms
David Robinson
November 22, 2009, 7:25 AM /
Imagine this scenario: Chris Koch and other top executives atNew Era Cap Co. are sitting down,trying to figure out which of its U. S. factoriesto keep open, either one in Derby or asister plant in Alabama. They paw through stacks of paperwork,comparing incentives, labor costs,taxes and utility rates. They weigh thepros and cons of each facility. They discussall the intangibles they can think of. “Wait,” someone says. “A big piece ofthe puzzle if we stay in Derby are the taxbreaks we’d be getting, tax breaks throughan industrial development agency. Wecan’t afford all the strings that are now attachedto them. Alabama’s looking betterand better.” That conversation didn’t happen— but it could happen a lot if Gov. David A. Paterson succeeds in pushing through his frightening proposal for IDA reform that would require most companies receiving tax breaks through those agencies to pay workers—and even some vendors— higher wages. “We were shocked,” says James J. Allen, the executive director of the Amherst Industrial Development Agency. “No one will use the IDAs if that legislation passes.” IDAs and other economic development officials for years have been battling similar IDA reform legislation spearheaded by Assemblyman Sam Hoyt, D-Buffalo. But Paterson’s proposal puts the embattled governor squarely behind the effort, with his own proposal that would impose even more onerous wage burdens on contractors, as well as many of the companies that occupy those buildings. At the heart of Paterson’s proposal is a requirement that most companies receiving IDA tax breaks pay “prevailing wages” of at least $14.68 per hour on upstate projects. That wage standard would apply to the construction firms building the facility, as well as any workers at the businesses or non-profit firms occupying those buildings, provided the project employs at least 100 people. The proposal also targets building maintenance and grounds work that often is done by outside contractors, specifically identifying janitors, grounds keepers and even garbage collectors, as being subject to the higher wage requirements on projects covered by the proposal. Retail workers also would be covered. Across upstate, projects valued at more than $4.65 million, and receiving tax breaks worth at least $96,115, would be required to meet the higher wage standards. The proposal would cover projects worth at least $10 million by non-profit groups employing at least 500 people. “It truly would put us out of business, because the costs it imposes on anyone who uses the IDA far outweigh the benefits,” Allen says. Brian Sampson, executive director of the pro-business Unshackle Upstate coalition, called the Paterson proposal “shameful.” “Our economy is in the worst shape it has been in since the Great Depression,” Sampson says. “How can the governor propose a measure that will destroy hope for economic recovery in New York?” The answer to that is politics. The politically- weakened governor is pandering to the labor unions that have hijacked the IDA “reform” effort into a push to force contractors working on taxpayer-backed projects to pay higher wages. Whether the governor has the political clout to push his proposal through the log-jammed state Legislature remains to be seen. The similar IDA legislation backed by Hoyt in the Assembly and state Sen. Antoine Thompson, D-Buffalo, in the Senate has cleared the Assembly twice in recent years, but never made it through the more narrowly-divided Senate. That’s one instance where it’s a good thing that very little gets done in Albany. With the governor’s IDA proposal, we can only hope it stays that way.
drobinson@buffnews.com