The Latest Effort to Expand New York’s Costly Prevailing Wage Mandate

Earlier this month, Governor Cuomo unveiled his 2020-2021 Executive Budget proposal, detailing his priorities and outlining his agenda for another legislative session in Albany.

Resurrected in the Governor’s budget was a policy Unshackle Upstate, the Buffalo Niagara Partnership and several of our advocacy partners around the state successfully defeated last year – a proposal to expand the state’s prevailing wage mandates to private construction projects.

Several versions of this proposal were introduced last year, including a bill that would require prevailing wage mandates and benefits be applied to any project receiving a single dollar of public support. The final version, introduced by the Governor, would have exempted New York City from these mandates, imposing them on the states more economically distressed regions, particularly Upstate.

The latest bill language from Governor Cuomo would apply these mandates on projects that receive thirty percent or more in public benefit and have a total construction cost of $5 million or more. These prerequisites are paired with a lengthy list of carve-outs and exemptions intended to protect certain development projects.

Some of the exemptions in this proposal include family dwellings, certain non-profit and affordable housing construction, Downtown Revitalization Initiative investments and the value of brownfield and historic rehabilitation credits. Additional carve outs are specific to New York City development, including construction of supermarkets, schools and certain small business incubator development, alongside the City’s crucial 421-A tax abatement program.

Despite all the specific language outlining what’s in or what’s out of these costly mandates, the bill goes on to create something called the Public Subsidy Board, which has the authority to rewrite most of the provisions of the bill. This board, consisting of 11 members largely appointed by the Governor, could decide with “the full force and effect of law”, to modify the percentage and total construction cost thresholds, add or remove benefit programs or make other fundamental changes to the proposal, without any legislative oversight. This would follow a troubling trend of elected leaders turning over authority to unelected boards and commissions to make decisions that impact New York taxpayers.

Now that Governor Cuomo’s latest proposal is public, negotiations with the Legislature will begin in earnest. Our position on this issue remains consistent – imposing these expensive mandates on private development projects will unnecessarily increase the cost of construction, resulting in fewer development projects taking place and less jobs. Those outcomes would hurt the Buffalo-Niagara region and other Upstate communities.

As Upstate cities like Buffalo work hard to revitalize their economies and attract new talent to the region, the state should focus on supporting those goals. The effort to expand the state’s burdensome prevailing wage mandates to private development would be a big step backwards for Upstate New York.

Unshackle Upstate, the Buffalo Niagara Partnership and others throughout the state will continue to work aggressively to highlight the negative impacts of this proposal and make sure our voices are heard by our leaders in Albany. You can learn more in the Partnership’s 2020 Advocacy Agenda.

By: Michael KrackerExecutive Director of Unshackle Upstate, a non-partisan, pro-taxpayer, pro-economic growth, education and advocacy coalition made up of business and trade organizations from all parts of Upstate New York.