screen-shot-2018-06-11-at-12-42-10-pm-e1528737894391-6002211A private charity is seeking the New York Legislature’s go-ahead to build housing for critically ill kids and their families on state-owned property. ***See update note at end of post.

The Legislature’s answer: Sure, you can go ahead and build—if you’re willing to pay extra (possibly a lot extra) to our union friends to do the work.

That scenario is playing out in the wake of a proposal by Ronald McDonald of Long Island to build its latest Ronald McDonald House near SUNY Stony Brook Children’s Hospital in Suffolk County.

Since it was started in 1974 through the efforts of Philadelphia Eagles players and a Philadelphia-area McDonald’s restaurant franchise owner, among others, Ronald McDonald House Charities has built hundreds of houses, family rooms and mobile facilities across the world. The count includes eight Ronald McDonald Houses near major medical centers in New York State.

The Stony Brook house requires legislative permission because it would be built on state property—which happens to be located in the Senate district represented by Majority Leader John Flanagan.

But Flanagan’s resulting bill, co-sponsored by Assemblyman Steven Englebright (D-Suffolk County), comes with two big strings attached.

First, it says construction work on the new facility “shall be deemed public work”—making it subject to the state prevailing wage law, which requires contractors to pay high union wage and benefit costs while also effectively subjecting them to inefficient union work rules. This will add at least 20 percent to the project cost, according to regional cost impact estimates in this 2016 Empire Center report.

The bill also would make Ronald McDonald House comply with the state’s inefficient Wicks Law, which adds to costs by forcing public entities to seek separate bids for a project’s electrical, HVAC and plumbing work. That is, unless it signs a project labor agreement (PLA) with the local building trade unions. PLAs typically hike costs by disqualifying all non-union contractors from bidding, meaning Ronald McDonald House is being forced to choose between two bad, and unnecessary, conditions.

Flanagan and Englebright didn’t invent this practice. Previous bills allowing construction of not-for-profit service buildings on the SUNY Albany, SUNY Old Westbury and several other SUNY campuses have included similar language. But imposing a stiff labor cost toll on a wholly privately funded project designed to benefit sick kids and their families is something of a new low, even for the Legislature.

Moving the wrong way

Unfortunately, when it comes to prevailing wage, many state lawmakers are looking to move in the wrong direction and force more builders to comply.

In their March one-house budget bill, Senate Republicans expressed interest in having a “discussion” about expanding the scope of projects on which builders must pay prevailing wage. But any discussion that looks objectively at the facts will find that prevailing wage, as it’s now applied, is indefensible.

Among other things, the state Department of Labor isn’t following the law it claims to be enforcing. As E.J. McMahon and Kent Garnder explained in Prevailing Waste:

The law is supposed to apply only when union contracts cover at least 30 percent of the workers in a given building trade in a given “locality”—but the New York State Labor Department doesn’t verify that the threshold is being met, and localities are defined on the basis of union jurisdictions.

Meanwhile, Michigan this month joined four other states that have repealed their prevailing wage requirement since 2015.

Update: Flanagan’s bill passed the state Senate 61-0, without debate, on Monday, June 11. The Assembly version is in the Rules committee, from which it can be sent to the floor for a vote at any time.

About the Author

Ken Girardin

Ken Girardin is the Empire Center’s Director of Strategic Initiatives.

Read more by Ken Girardin

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.