Proposed Prevailing Wage Bill Will Hurt Economic Development

Published on: June 7, 2016

Memorandum Opposed: Relates to hours, wages, and supplements in contracts for public work.

The Agency, which governs the Broome County Industrial Development Agency and the Broome County Local Development Corporation, opposes the above referenced legislation. If passed, this legislation would force every project financed, whether partially or completely, with funds, subsidies, or tax exemptions provided by state or local public authorities, to pay prevailing rates of wages and supplements.

This type of mandate would add an average of 28 percent to the cost of building projects in Upstate, according to the Center for Governmental Research. This would make New York an even more expensive and less competitive climate for businesses to start and thrive.

Moreover, under this proposed law, entities such as ours would henceforth be known as "public entities/' and the projects in which we engage, "public works," providing no economic benefit to the business owner or community. As such, whenever The Agency, or any of the numerous entities like ours, under this new law, secures funding, waives a fee, or transfers any property at less than fair market, the project is considered a public works project, subject to prevailing wage laws.

Abiding by prevailing wage mandates would drive-up the cost to build projects in New York State, which is already the most expensive state in the country to start and operate a business in. This is also due to the fact that New York State has the fourth highest Workers Compensation premium rate in the country (Insurance Journal), as well as the highest state and local tax burden in the country (Tax Foundation). This has had a devastating effect on Upstate.

Between March 2015 and March 2016, private sector jobs in Upstate (52 counties North of Westchester) increased by only 0.4%, compared to the national private sector growth of 2.5%. That is to say, Upstate counties grew private sector jobs at 16% of the national rate (NYS Department of Labor).

Mandating that every project that entities such as IDA’s fund, whether partly or entirely, be subject to prevailing wage rates, and be deemed as ''public works “projects would devastate economic development in Broome County and New York as a whole. For these reasons, The Agency opposes this legislation and asks for your support on this important matter.

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