Legislators stymie Collins plan for IDA
July 20, 2009
Proposals would add to projects’ costs.
State legislation that would let industrial development agencies again offer tax-exempt financing to not-for-profit organizations has been stalled in Albany by proposed reforms — one in particular:
Forcing those beneficiaries to pay the prevailing wage to the construction workers on their projects.
Lawyers for the Erie County IDA and County Executive Chris Collins recently proposed a way around the roadblock. They drafted a measure to let a special unit of Erie County’s IDA, rather than the IDA itself, arrange the cheaper, tax-exempt financing that hospitals, schools and colleges prefer for expansions.
Other counties are taking similar paths. All Collins and the county IDA needed was the County Legislature to go along. Then the tax-exempt financing arranged through the IDA’s “Industrial Land Development Corp.” would pass muster with the Internal Revenue Service.
The Legislature’s consent could help projects envisioned by Women & Children’s Hospital, D’Youville College, Tapestry Charter School and the Buffalo Niagara Medical Campus, according to Collins and others favoring his proposal.
But some Democrats in the County Legislature want to alter the Collins proposal by adding the prevailing- wage requirement. And they haven’t stopped there.
Their competing version of Collins’ bill would require contractors to offer worker-training programs, consider project-labor agreements for undertakings exceeding $10 million and abide by the county’s “Lowest Responsible Bidder” law, another union-championed requirement allowing any bidder to challenge the award of a contract.
The Legislature and Collins disagree over whether the Lowest Responsible Bidder Law even is on the books. Collins vetoed it in April. The Legislature overrode the veto. Collins ignored the override because he also considers the law “null and void.”
The Legislature also would require the Industrial Land Development Corp.’s authority to expire July 30, 2010; Collins would have to return to the Legislature if he wanted to extend it.
Collins says the Legislature’s add-ons essentially push the county back to Square One.
“They threw in everything but the kitchen sink,” he complained. “They made it worse than what Albany is working on. These legislators, in an election year, could have taken credit for $200 million in construction activity. Instead, they become the obstructionists I have called them out to be.”
He promised to focus public scrutiny on the Legislature to force the proponents to back down. He will have a sympathetic partner in the Buffalo Niagara Partnership.
Andrew J. Rudnick, the organization’s president and chief executive, told the Legislature’s chairwoman that the amendments would accomplish nothing.
“The numbers do not change — incentives that save not-for-profits approximately 10 [percent to] 15 percent of their construction costs do not offset the 28 percent increase in costs that prevailing wage adds,” he said. “If Erie County is looking to emulate a state approach to economic development, we could highly recommend it not be New York’s that you copy.”
Unions accuse the development agencies of wasteful spending by providing low-interest money to companies that do not produce promised jobs. Jobs With Justice, a labor-backed group, says one in every five IDA dollars went to failing projects in 2006. Denis Hughes, president of the state AFLCIO, has called IDAs part of a “failed economic strategy for upstate.”
The unions are pushing to require not-for- profit organizations as well as for-profit enterprises to pay prevailing wages, which are higher for construction, for projects that receive IDA financing.
Some not-for-profits might be required to pay the prevailing wage as a condition of any government grants they receive for their projects. But the union campaign seems to have taken on added importance with the availability of federal stimulus money for job creation.
Democrats in the County Legislature have taken the unusual step this year of forming a communal campaign fund, to supplement their individual funds. Unions already have provided several hundred dollars in support.
Legislator Timothy M. Kennedy, D-Buffalo, unveiled the Legislature’s amendments last week when his Economic Development Committee discussed Collins’ request.
Kennedy, one of the Legislature’s most pro-union members, was the force behind the county’s Apprentice Training and the Lowest Responsible Bidder laws. Collins has flouted both.
Collins, however, blamed the amendments on Legislature Chairwoman Lynn M. Marinelli, D-Town of Tonawanda, accusing her of catering to special interests: “When they say ‘jump,’ Lynn Marinelli says, ‘how high?’ ” he charged.
Marinelli says she only is letting her committee chairman handle the matter — her common practice.
Kennedy, noting that he and Collins previously disagreed about workers’ rights issues, said he does not think he can vote for legislation that lacks clauses protecting workers.
“This is an opportunity for all of us to demonstrate that we can work together,” he said. “If we can ensure that these projects move forward, but that there also is a component that protects the working men and women, then it’s a great day.”
Kennedy’s committee might meet again this week to take another crack at the legislation.
Said Collins: “In the case of the unions, they think it’s a debate between the prevailing wage and the regular wage. I think it’s a debate between the prevailing wage and no wage.”
