For decades, our politicians have had a disconnect from development on Long Island. We send more money to Albany then we receive. We pay the highest taxes. We pay the highest utility rates, and our labor costs are already at the high end of the spectrum. Despite all this, Albany now wants to pass prevailing wage legislation that will mandate the highest cost of labor on every private project undertaken under the auspices of an industrial development agency (IDA) or in which the government has a role.
The Commercial Industrial Brokers Society (CIBS), a nonprofit, nonpolitical, business organization is weighing in on the legislation. Our knowledge, as well as our members’ relationship with these transactions, should provide real facts to the debate.
The proposed legislation would broaden the definition of public work, requiring construction contractors to pay more than what union labor is paid. Most projects already have a portion of union labor included their costs. We are all in favor of fair pay, but this legislation goes way beyond that. To be clear, prevailing wage includes ALL the costs of running a union, including the unfunded pension obligations for previous union members. These two items alone are often more than 100 percent of an actual salary. This will impact projects that receive tax breaks from industrial development agencies.
This legislation comes at a time when we finally realized that building affordable housing doesn’t saturate our schools with more students while watching our communities grow. This misinformation has circulated for years with the aim of stifling construction, despite contrary data presented at every public hearing. Tax revenues from these projects have had a significant role in keeping the tax rates down for our school districts. Town and village officials are starting to realize that affordable housing is good for business while watching their communities grow.
Developers seeking to build affordable projects and buildings have to seek IDA incentives to offset high property taxes. Now, our politicians want to throw up another road block, which will ruin any chance for this necessary development to continue. They want to mandate these policies without understanding the total impact.
Let’s say NO to the prevailing wage legislation, because ultimately all labor will suffer when projects don’t go forward. The attempt to even the playing field certainly will lead to higher unemployment. Developers need to determine who builds their projects and at what cost, otherwise they won’t build.
If this legislation is enacted, your taxes will go up more rapidly as development slows. It took years to educate Long Islanders that these projects are beneficial and, now, those in Albany think they know better than we do.
The unions are promising to support politicians who back prevailing wage, thus enabling these elected officials to stay in office while we are stuck with the higher tax consequences. We’ll be living with the decisions of politicians who only care about keeping their jobs.
Call your State Senator or Assemblyman now. Tell them to end the prevailing wage legislation immediately.
David Chinitz is a past president of CIBS, the region’s largest commercial real estate organization.