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IDA “REFORM” BILL EQUALS MORE JOB LOSSES FOR NEW YORK
by Craig W. Turner, Senior Director, Public Policy, Buffalo Niagara Partnership

There is a current push by special interests to have previously rejected IDA “reform” legislation included in the 10/11 state budget. Beware! – in 2010, “reform” means changing existing legislation to do what your specific interest group wants. Proposed IDA “reform” is a great example – an attempt to impose an expensive prevailing wage mandate at the request of organized labor on any employer utilizing or indirectly impacted by IDA programs in New York State.

Hiding this legislation in the budget doesn’t make it any less awful of a bill. In Upstate, particularly, mandated prevailing wage hits hard – a 2003 study by the Center for Governmental Research reports that in Upstate New York such a requirement raises the cost of construction projects by 28%. What employer would want to save 10-15% (typical IDA benefits) if that was more than offset by a 28% increase to his or her construction costs? Would you?!

Here’s the proof – New York’s Ulster County, at the behest of local organized labor, implemented a prevailing wage requirement in 2007. In January, 2009, the Ulster County IDA suspended the mandate because it had attracted zero – that’s zero – projects under the regulation. In the two months following, UCIDA administered three projects.

Competition for private sector investment nationally and globally is cutthroat. Thus far, Albany has been unable – or, more accurately, unwilling – to address spending issues that have kept New York lagging behind. To mitigate the sting of the factors that continue to make us uncompetitive – high taxes, burdensome regulation and an expensive cost of doing business – we’ve established economic development programs such as IDAs, the Brownfield Cleanup Program and low-cost hydropower. In a perfect world, our business climate would be attractive enough without them; in real life, it’s definitely not.

That’s why the Upstate business community has referred to the proposed IDA “reform” legislation as “job-killing.” It takes a necessary and worthwhile business attraction program and renders it completely useless. If this legislation passes, employers interested IDA incentives as a possible tipping point in New York’s favor will end the conversation before it begins. Why? Because other states aren’t forcing the same mandates on them. Other states aren’t telling employers that we only want you if you play by our highly-regulatory rules. No, they’re inviting them – and the job opportunities they bring – with open arms.

In 2010, job creation has become so important in America that it even nudged health care reform out of the top spot as Washington’s #1 priority. In the budget or as standalone legislation, this bill is a job killer, and any state legislator supporting it should be ready to wear that badge through Election Day.