IDAs can revive upstate

First published in print: Tuesday, June 2, 2009

Before it adjourns in late June, the state Legislature has an opportunity to do something that will benefit the upstate economy. It does not cost the taxpayers any money; it will create thousands of construction and permanent jobs throughout the state; and it will give legislators a significant accomplishment for the 2009 session.
The Legislature should pass A.5700/S.2898, sponsored by Assemblyman Joseph Morelle, a Democrat from suburban Rochester, and Sen. William Stachowski, a Democrat from suburban Buffalo, which would make permanent the ability of industrial development agencies to encourage so-called civic facility projects, many of which are sponsored by non-profit organizations. Construction projects totaling more than $2.5 billion have been stalled for nearly a year and a half by a legislative impasse over continuation of this authority.

The heart of the impasse is the insistence by organized labor that prevailing wages must be paid to construction workers on IDA projects. Yet, prevailing wages are only required under New York law for projects that are truly public. Projects owned by non-profit organizations are clearly not government projects.

The non-profit organizations seeking IDA assistance include those which assist the mentally and physically handicapped; libraries; YMCAs; and various health and educational institutions. These are not governmental organizations and they should not have to pay prevailing wages on their construction. Moreover, if non-profits were forced to pay prevailing wages, which are often 20-30 percent higher than market wages, most of these projects would never be built.

IDA projects do not cost taxpayers, either. IDAs assist projects in a number of ways. Bonds are sold to investors to finance projects, but the risk of loss stays with the investors, not local or state governments. IDAs can also offer exemptions on the sales tax on construction materials and mortgage taxes for the project. Without these exemptions, most projects would never be built, so no revenue is "lost" to government because of IDA assistance.

Pure and simple, the impasse over IDA projects is because organized labor insists that they get their way. Thousands of construction jobs, for both union and non-union labor, are being jeopardized. Here in the Capital Region, the long-awaited AMD project is estimated to cost over $4 billion; yet, $2.5 billion more in vital construction projects all over New York -- not requiring a nickel of taxpayer money -- are being held up by organized labor's unreasonable demands.

New York does not need to wait for more federal money to give a real boost to its construction industry and its non-profit sector. It's time that Gov. David Paterson and the Legislature pass the Morelle/Stachowski bill.

Rebecca Meinking is president of the Empire State Chapter, Associated Builders and Contractors.