Democrats, now in full control of state government, revealed their top priority this week: rank politics — consequences be damned.

That’s clear from two proposals in the Legislature’s one-house budget bills: one to extend “prevailing wage” laws to private construction projects that get public incentives; the other to create a “pied-à-terre” tax in the city. Both spell trouble.

Prevailing-wage laws (which force builders to pay union rates on public projects) fuel building costs — by as much as 23 percent in the city, the Independent Budget Office found. Applying the laws to private construction in Mayor Bill de Blasio’s affordable-housing plan, the IBO notes, would add $4.2 billion to its price tag.

Imposing higher costs also defeats the purpose of incentives and thwarts development. When city pols demanded Related Cos. pay a “living wage” at a Bronx mall planned for the Kingsbridge Armory, the firm walked. A decade later, the building is still vacant.

Such results are fine with the unions that are the driving force behind these laws; blocking non-union jobs is the whole point.

And Democrats in the Legislature plainly see pleasing unions as Job No. 1.

Naked politics is also behind the sudden enthusiasm for a pied-à-terre tax. After all, it’s aimed at people who don’t live in the city, but only visit — and so don’t vote here. What New Yorker would object to a tax on wealthy out-of-towners?

Well, first off: Just as with the “congestion” tolls proposed for Manhattan, this is the state grabbing revenue that should belong to the city, like other property taxes.

The governor and state Senate would dedicate the revenue for the MTA — but you can bet they’ll count it as their contribution to the agency. (And the Assembly just wants the tax to fund its overall huge boost in statewide spending.) It also means trouble for future MTA budgets, the Empire Center’s E.J. McMahon warns, since real estate tax revenues are highly volatile.

Plus, as McMahon also notes, the tax would drag down all luxury unit values, meaning lower assessments and thus less tax revenue for the city. The nonpartisan Citizens Budget Commission points to the same flaw, which also likely means the tax won’t bring in as much as projected.

Lawmakers don’t seem worried by any of this: It gives them more to spend now — and to them, what else matters?

© 2019 New York Post

You may also like

Bill Requires Municipalities To Maintain Their Websites

Skoufis’ legislation references a 2014 Empire Center highlighted the poor quality of municipal websites many of which lacked basic information. The report found that less than 20% of local governments received a passing grade on their website’s availability of information and usability including two municipalities that did not have a website. Some of those websites have improved over the past five years, including Jamestown’s, which received an “F” rating in 2014. The updated city website includes all of the information Skoufis’ legislation would mandate. Read More

Albany’s ‘big ugly’ provides political cover, but has some benefits

“This has been one of the worst developments in the political process here in New York in modern history,” said E.J. McMahon of the fiscally conservative Empire Center for Public Policy think tank and a former aide to Gov. George Pataki. “It really is corrosive of accountability and democracy and, implicitly, the constitution prohibits it.” Read More

Panel at LIA meeting knocks state single-payer health care bill

"Ninety-three hospitals would lose more than 10 percent of revenue," said Bill Hammond, director of health policy at the Empire Center for Public Policy, a fiscally conservative  Albany think tank. Read More

‘Pork’ Bill Hangs Over Other Issues in Albany

E.J. McMahon, research director for the Empire Center for Public Policy, a fiscally conservative think tank, questioned the need for these projects. His organization found recent SAM allocations paid for projects he deemed frivolous such as a skate park and a local highway garage. “It’s this huge mutual back-scratching,” he said. Read More

Capitol pressroom

Former Assemblyman Richard Brodsky and EJ McMahon, Founder and Research Director of the Empire Center, shared their insights into the effects of the legislation and the political implications. Read More

UNFINISHED BUSINESS AS ALBANY SESSION CLOCK TICKS DOWN

Of the $508 million in pork awarded last year, most of it came from the State and Municipal Facilities program, which is widely derided as legislative slush fund, according to an analysis by the fiscally  conservative Empire Center for Public Policy. Read More

EDITORIAL: When Albany plays Santa, hold on to your wallet

As the Empire Center’s Ken Girardin reported last week, new SMFP cash “was noticeably missing from the budget bills adopted on April 1, raising the suspicion that a fresh infusion” will be part of the Big Ugly legislation rushed through in the end-of-session crush. Read More

Business lobby opposes wage mandate

E.J. McMahon, research director of the Empire Center for Public Policy, estimated that expanding the prevailing-wage mandate in New York to all projects that get public support would boost construction costs significantly. In an essay published after the legislation was filed, McMahon argued the proposed expansion resembled a “costly protection racket” for New York’s “politically powerful labor cartel.” Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

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.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!