For Release — December 18, 2017
State Business Leaders Join Together to Advocate for Prevailing Wage Reforms
Growing infrastructure needs, coupled with declining revenue, highlight need to keep costs in line
ALBANY, N.Y.—A coalition of the state’s leading business and industry groups today announced their commitment to advocating for reforms to New York’s prevailing wage law. In light of the state’s budget multi-billion dollar deficit and overwhelming infrastructure needs, the coalition is calling on members of the Legislature to reform this outdated and costly mandate.
According to the Empire Center’s seminal report on the topic, “Prevailing Waste: New York’s Costly Public Works Pay Mandate”, prevailing wage increases the costs of construction jobs by as much as 25 percent.
The report detailed prevailing wage cost increases by area:
- Albany-Schenectady-Troy area: 13 percent
- Rochester and Syracuse Metro areas: 14 percent
- Dutchess-Putnam County area: 15 percent
- Long Island and Buffalo Metro area: 20 percent
- New York City Region: 25 percent
“Even with the approval of unprecedented levels of capital spending in the last two years, New York State and its municipalities face huge unfunded costs to maintain and upgrade our roads, bridges, water systems and other public infrastructure,” said Heather C. Briccetti, Esq., president and CEO of The Business Council of New York State, Inc. “Therefore, it is essential that we spend our limited resources efficiently. New York should pay a fair and reasonable wage on public works projects, while protecting the interests of state taxpayers.”
“New York State faces very serious challenges in 2018 and beyond. Our budget is $4.4 billion in deficit, our state debt has climbed to the second highest in the nation, and the backbone of our economy – infrastructure – will require hundreds of billions of critical investment in the years to come,” said Greg Biryla, executive director of Unshackle Upstate. “As our economy continues to lag, raising taxes is not an option. Reforming state rules and regulations like our broken prevailing wage mandate can save state budget billions now in and in the years to come and ensure our infrastructure needs are met. Difficult times require smart solutions.”
“With New York’s significant infrastructure needs amid escalating financial concerns, it only makes sense for serious reform to how we calculate prevailing wage," said Mike Durant, NFIB/NY State Director. "Current practice has New York woefully out of line with federal standards and places an enormous burden on taxpayers and small business. With difficult financial decisions looming in 2018, it only makes sense to enact real reforms on New York's prevailing wage statute.”
“Once again we find New York State government as an outlier when compared to other states. Not only have 23 states taken the responsible step of repealing their prevailing wage program, but 26 of the remaining states follow the federal standard of needing to represent 50 percent of the workforce in order to negotiate prevailing wages,” said Brian Sampson, President of Associated Builders and Contractors, Empire State Chapter. “Only New York has taken action to lower the standard to 30 percent. It’s time New York gets back in line with the rest of the country and follow the federal standard. That will allow us to more quickly rebuild our infrastructure and protect our citizens.”
Adding up funding commitments to the MTA, state DOT, the Thruway Authority and the recent push to upgrade drinking water reliability around the state, New York faces infrastructure and construction spending in the hundreds of billions of dollars over the next two decades. Those estimates do not even include the so-called Gateway Tunnel Project, which could add upwards of $10-20 billion to the state’s tab.
Reforming New York’s prevailing wage law so it gets back to its original intent will help reduce costs and allow the state to adequately fund its myriad of critically important infrastructure projects. Unfortunately, the current law no longer conforms to present-day conditions and has fallen woefully behind the federal standard outlined in the Davis-Bacon Act.
Further exacerbating the problem with unnecessary cost increases associated with the state’s current prevailing wage law is this from the Empire Center,
“…the process for determining and implementing New York’s prevailing pay mandate is extraordinarily opaque. For example, the Labor Department does not release contract documents that form the basis for setting the wage. And it apparently does nothing to verify that the 30 percent union coverage threshold is actually being met in all localities.”
Despite the unnecessary cost increases associated with the prevailing wage law, special interests in Albany are pushing for prevailing wage to be expanded to projects that are not entirely paid for with public funds. Such an expansion is not only bad for the overall health of New York State’s already sluggish economy, it would force many private construction companies out of business.
Members of the coalition stand ready to work with state policymakers and other interested parties to ensure New York is best positioned to meet its infrastructure needs, while at the same time protecting taxpayer dollars and limiting waste.