June 17, 2010 Union-friendly bill to overhaul IDAs off table The Business Review (Albany) - by Adam Sichko
A controversial bill imposing union-rate wages on private-sector development likely will not be voted on this year, the bil's sponsor said on Thursday.
The legislation, backed by labor unions, would implement a series of changes to the 115 industrial development agencies (IDAs) in New York.
IDAs help finance private-sector projects by offering tax exemptions and helping sell tax-exempt bonds.
I's been more than two-and-a-half years since IDAs have had the ability to assist on projects for hospitals or other nonprofits - stalling an estimated $2.5 billion of construction.
The legislation in question enables IDAs to do that again - but it also tacks on wage mandates that business lobbies warn will kill projects before they even begin.
The bill includes a number of other reforms, including strengthened state oversight of IDAs and tougher requirements on reporting their activities.
The Assembly committee on local governments was scheduled to vote on the bill on Wednesday. But committee chairman Sam Hoyt (D-Buffalo) pulled the bill off the agenda at the last minute.
In an interview, Hoyt, who controls the committe's agenda, said he has no plans to bring the bill back again this year. Hoyt said he is looking to Gov. David Paterson and fellow Democrats in the Senate to do more to negotiate and push the bill forward.
I call it a kitchen-sink bill. It overhauls virtually every aspect of IDAs which, in my opinion, are in desperate need of reform. And it is somewhat controversial, Hoyt said. There is't a single component of the bill 'm not prepared to discuss and negotiate and ultimately reach a compromise on. But I need partners in order to do that.
Hoyt said the bill is not dead for this year. There is a slight chance he could bring it up during any special legislative session this fall, which may be needed to address the stat's financial problems.
"If the Senate or governor says, 'Come on, let's get to work,' then I'm prepared, Hoyt said. But at this point, the focus seems to be on the budget and other important legislation."
Business lobbies cheered the development.
But ther's one catch - the stalled bill means IDAs will continue to lack the ability to spur nonprofit projects, since that bonding authority is tied to the wage mandates.
The state is shooting itself in the foot by not extending that part of the law. The state has chosen to hold nonprofits hostage over wage mandates, said Brian McMahon. He heads the New York State Economic Development Council, a statewide lobby for IDA officials and other local economic developers.
IDAs have existed in New York for 23 years, but they do not have permanent authority to finance nonprofit projects.
The bill, which has sponsors in both chambers, requires that developers and contractors working on IDA-funded projects pay prevailing wages. Those often mirror union wages, which tend to be higher than market-based wages.
A potentially more damaging part of the bill requires companies utilizing IDA assistance give their lowest-paid employees what's known as living wage - the median hourly wage for all occupations in the region.
The living wages would have to be paid as long as the company is receiving IDA assistance - and for five years after that assistance ends.
The wage mandates would be particularly painful upstate, McMahon said.
It becomes a 15- to 20-year requirement, and it's incredibly costly. It's quite outlandish, McMahon said.
The question now is, what will happen to this issue? McMahon added. It will continue to be a challenge for us, but the real grass-roots lobbying we're doing is speaking pretty loudly.
Hoyt said the wage mandates are central to the bill.
Government-financed projects ought to produce jobs that pay an adequate wage. End of story, Hoyt said. The logic is that where government resources are being used, the government ought to insist a return on investment of decent-paying jobs.
