2019 Budget Fails to Close the “Public Works” Loophole (NY)

Posted by National Alliance for Fair Contracting on

Opponents of commonsense reform mislead with false cost figures

For Immediate Release
April 1, 2019

Last night, state leaders reached a budget agreement for fiscal year 2019 which unfortunately fails to include the proper definition of public works. Properly defining public works is a commonsense reform to apply anti-corruption protections and family-supporting prevailing wages to all construction projects which receive public assistance.

To protect taxpayers from wasteful spending and corruption, New York requires competitive and transparent public bidding by contractors on all public works construction projects. Unfortunately, a loophole in state law allows millions of taxpayer dollars to be spent without the anti-corruption and transparency demanded of traditional public work projects. Increasingly, economic development projects across the state fall through this loophole, allowing public money to bypass these safeguards as it goes to private interests. Closing the loophole by properly defining public work to include all projects supported with public money will provide much needed accountability and transparency in government spending.

The measure’s opponents successfully muddied the water by spreading misinformation to suggest it would result in “huge” increases in construction project costs. The truth is that defining public works would reward workers and taxpayers, not the wealthy and irresponsible contractors exploiting our flawed system. As per economists Frank Manzo, Alex Lantsberg, and Kevin Duncan, “the overwhelming majority of peer-reviewed research conducted over the last 15 years forms the consensus view that construction costs are not affected by prevailing wages.” Sixteen other states across the country apply a more comprehensive definition of public work, which apply middle-class prevailing wages. Unsurprisingly, the doomsday scenario of huge cost increases and less development, which opponents claim would befall New York, has not materialized in these other states.

While today’s state budget was a missed opportunity, the New York Foundation for Fair Contracting looks forward to when all taxpayer-funded construction goes to the lowest responsible bidders, not the most politically well-connected contractors. The NYFFC is a non-profit established to level the playing field in public works construction for the benefit of taxpayers, responsible contractors, and workers.

(Read More)

Another Voice: New York needs to define ‘public work’ on construction jobs (NY)

Posted by National Alliance for Fair Contracting on

By Matt Kent
Published February 2, 2019

In his recent State of the State address, Gov. Andrew M. Cuomo threw his support behind a key plank of the growing movement to properly define public work construction. His call that “project construction with public subsidies should be subject to the prevailing wage so they’re built right” is encouraging news for fans of responsible government.

The New York Foundation for Fair Contracting, a nonprofit promoting a level playing field in public construction to benefit taxpayers, contractors and workers, applauds Cuomo’s initiative.

For over a century, New York State has required contractors on taxpayer-funded government construction projects to pay workers the region’s “prevailing wage.” This practice, and the requirement these projects be competitively and transparently bid, have long enjoyed bipartisan support throughout the state.

However, many economic development projects in place across the state fall outside the long-standing taxpayer and worker protections built into state law. Millions of taxpayer dollars are spent without the transparency demanded of traditional public work projects.

Properly defining “public work” to include all projects supported with public money (including IDAs, regional economic development councils, and the Buffalo Billion) will promote accountability and transparency in government spending. It’s unacceptable that the current loophole allows public money to bypass this process as it goes to private interests.

As reported in The News, some critics called the governor’s prevailing wage proposal a “death sentence” for upstate economic development, saying it would increase costs and hurt the local economy. Quite the opposite – the vast majority of peer-reviewed studies find no connection between prevailing wage and project costs. In fact, when Indiana outright repealed its prevailing wage law, the Midwest Economic Policy Institute found the state “failing to deliver any meaningful cost savings or increased bid competition promised by those in favor of repeal.”

Instead, the repeal triggered an 8.5 percent collapse in blue-collar construction worker pay and a surge of out-of-state workers on state construction jobs. Conversely, communities with robust prevailing wage laws report stronger tax bases and lower reliance on public assistance programs. Weak fair contracting laws hurt workers and make little economic sense.

The New York Foundation for Fair Contracting is encouraged by the prospect of an inclusive definition of public work, which will result in greater protection for state taxpayers, better pay for local workers, and fair and transparent bidding.

Matt Kent of Buffalo is an analyst with the New York Foundation for Fair Contracting.

(See Article)