ALBANY - In an example of how closed-door battles in Albany involving powerful lobbying forces can affect New Yorkers' lives, negotiations continued this weekend over a bill called industrial development agency reform.
Despite its innocuous title, the bill could determine how much a family pays for nursing home care, senior citizens residences or even in property taxes for a new school.
The AFL-CIO, one of New York's most influential special interests, is pushing for significant changes in industrial development agencies before Monday's scheduled end of the 2008 legislative session. IDAs were created by local governments in recent decades to provide tax-free financing and other tax breaks to attract and retain employers. But for just as long, IDAs have been criticized for not delivering on the promised jobs, while providing tax breaks to politically connected companies.
“The IDAs over the last 25 years really have not worked,” said AFL-CIO President Denis Hughes.
Many would agree.
But the fight is less over whether IDAs should be reformed. The toughest battle inside those closed doors with lobbyists, lawmakers and their lawyers is whether “prevailing wages” should be required in IDA-backed projects during construction and whether “area wages” should be required for jobs created by the projects. In most cases, prevailing wages and area wages are close or the same as union wages.
An element of the IDA law lapsed in January. That meant IDAs could no longer provide tax-subsidized financing to nonprofit agencies in part because - relying on government funding and private donations - they don't pay union-level wages on the projects.
Unions are trying to make that lapse permanent, saying taxes shouldn't subsidize poorly paying jobs. Nonprofit agencies are saying they are trying to restore or at least extend the lapsed provision so they can afford to provide essential public services.
Requiring union-level wages would increase the cost of a project for the public by an estimated 28 percent and eliminates the price advantage of contractors who hire nonunion workers, according to the nonprofit groups.
The New York State Economic Development Council, which is opposing the union, says $2.5 billion in projects from nonprofit agencies are on hold until the issue is resolved. That includes hospital wings, nursing homes, senior living facilities, community homes for the mentally ill, YMCAs, college campus buildings and housing for low-income New Yorkers.
New Yorkers using those services would foot the bill for that additional 28 percent cost, a total project estimate driven up by union-level wages 57 percent higher than nonunion contractors could pay, said Brian McMahon, executive director of the council.
“This is about quality of life without a doubt,” McMahon said. “These are quality-of-life projects and it affects the services these nonprofit agencies can provide.”
But Hughes said paying prevailing wages is also about quality of life, not just for the worker and perhaps for the union he or she joins, but for the community's economy and the state's income tax revenue.
Hughes sees nonunion wages in IDA projects as contributors to the decline in New York's economy and the exodus of workers to other states for better opportunities and lower taxes.
“They put wages in competition, so wages came down,” Hughes said. “If we are going to use our tax dollars to subsidize minimum wage jobs, there's something wrong.”
Hughes said nonprofit agencies have attracted out-of-state contractors who offer a lower price through the use of nonunion labor, taking jobs away from New Yorkers. He also noted the “I” in IDA is for industry, and shouldn't be used to create jobs in nonprofit agencies.
“I sympathize with the nonprofits, but this is an economic development tool,” Hughes said.
About $300 million in nursing home and senior residence projects alone are on hold, according to the New York Association of Homes & Services for the Aging.
“Local not-for-profits are not the cause of the controversy,” said Carl Young of the nonprofit nursing homes association. “What will happen is that needed senior facilities will go unbuilt, impacting access to services.”
“Construction jobs will not be created, nor will any ongoing jobs be created or preserved by these unrealized projects,” Young said. “In the end, New York will fall farther behind other states in the development of modern senior housing and care facilities, which will drive even more of our seniors to bordering states like New Jersey and Pennsylvania where they can more readily find the options they desire.”
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On the Net:
http://www.state.ny.us
www.nysaflcio.org
www.nysedc.org
www.nyahsa.org
AP-ES-06-21-08 1422EDT
The AFL-CIO, one of New York's most influential special interests, is pushing for significant changes in industrial development agencies before Monday's scheduled end of the 2008 legislative session. IDAs were created by local governments in recent decades to provide tax-free financing and other tax breaks to attract and retain employers. But for just as long, IDAs have been criticized for not delivering on the promised jobs, while providing tax breaks to politically connected companies.
“The IDAs over the last 25 years really have not worked,” said AFL-CIO President Denis Hughes.
Many would agree.
But the fight is less over whether IDAs should be reformed. The toughest battle inside those closed doors with lobbyists, lawmakers and their lawyers is whether “prevailing wages” should be required in IDA-backed projects during construction and whether “area wages” should be required for jobs created by the projects. In most cases, prevailing wages and area wages are close or the same as union wages.
An element of the IDA law lapsed in January. That meant IDAs could no longer provide tax-subsidized financing to nonprofit agencies in part because - relying on government funding and private donations - they don't pay union-level wages on the projects.
Unions are trying to make that lapse permanent, saying taxes shouldn't subsidize poorly paying jobs. Nonprofit agencies are saying they are trying to restore or at least extend the lapsed provision so they can afford to provide essential public services.
Requiring union-level wages would increase the cost of a project for the public by an estimated 28 percent and eliminates the price advantage of contractors who hire nonunion workers, according to the nonprofit groups.
The New York State Economic Development Council, which is opposing the union, says $2.5 billion in projects from nonprofit agencies are on hold until the issue is resolved. That includes hospital wings, nursing homes, senior living facilities, community homes for the mentally ill, YMCAs, college campus buildings and housing for low-income New Yorkers.
New Yorkers using those services would foot the bill for that additional 28 percent cost, a total project estimate driven up by union-level wages 57 percent higher than nonunion contractors could pay, said Brian McMahon, executive director of the council.
“This is about quality of life without a doubt,” McMahon said. “These are quality-of-life projects and it affects the services these nonprofit agencies can provide.”
But Hughes said paying prevailing wages is also about quality of life, not just for the worker and perhaps for the union he or she joins, but for the community's economy and the state's income tax revenue.
Hughes sees nonunion wages in IDA projects as contributors to the decline in New York's economy and the exodus of workers to other states for better opportunities and lower taxes.
“They put wages in competition, so wages came down,” Hughes said. “If we are going to use our tax dollars to subsidize minimum wage jobs, there's something wrong.”
Hughes said nonprofit agencies have attracted out-of-state contractors who offer a lower price through the use of nonunion labor, taking jobs away from New Yorkers. He also noted the “I” in IDA is for industry, and shouldn't be used to create jobs in nonprofit agencies.
“I sympathize with the nonprofits, but this is an economic development tool,” Hughes said.
About $300 million in nursing home and senior residence projects alone are on hold, according to the New York Association of Homes & Services for the Aging.
“Local not-for-profits are not the cause of the controversy,” said Carl Young of the nonprofit nursing homes association. “What will happen is that needed senior facilities will go unbuilt, impacting access to services.”
“Construction jobs will not be created, nor will any ongoing jobs be created or preserved by these unrealized projects,” Young said. “In the end, New York will fall farther behind other states in the development of modern senior housing and care facilities, which will drive even more of our seniors to bordering states like New Jersey and Pennsylvania where they can more readily find the options they desire.”
---
On the Net:
http://www.state.ny.us
www.nysaflcio.org
www.nysedc.org
www.nyahsa.org
AP-ES-06-21-08 1422EDT
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