http://www.dailygazette.com

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Groups: Allow IDAs to help nonprofits
Dispute over prevailing wages holding up enabling legislation
BY BOB CONNER Gazette Reporter

    Industrial development agencies in New York have been unable to finance construction projects for nonprofits since Jan. 31, and legislation that would reauthorize them has been tied up in a dispute about prevailing wage rates.
    A coalition of nonprofi t, municipal, business and economic development groups claimed at a news conference Tuesday that more than $2 billion worth of construction projects have been stalled across the state. Some of them could be built without the IDA financing, advocates said, but at a higher cost that would often be passed on to taxpayers.
    Locally, Schenectady Metroplex Development Authority Chairman Ray Gillen said Union Graduate College secured IDA funding for its Nott Terrace project in January, just before the deadline. But he said Schenectady County Community College’s plans to build student housing off lower State Street could be adversely affected by the IDA funding standoff, because costs would rise for the project without IDA involvement.
    IDA bondholders do not have to pay federal or state income taxes on the interest payments they receive. As a result, the bonds are issued with interest rates more than 2 percentage points lower than commercial rates, the advocates said.
    Jeff Bray, chairman of the state Economic Development Council, said the borrowers can also spread out their payments over longer terms when they go through IDAs. Bray, who is from Fulton County, said local projects that were reliant on IDA funding included the Perth Primary Care Center, an offshoot of Nathan Littauer Hospital that opened last year, and the new YMCA set to open this year on Route 29 in the town of Johnstown, near Gloversville.
    Bray and the others at the news conference, including representatives of the state Business Council and the Conference of Mayors and Municipal Officials, support a bill (A-2557) sponsored by Sen. Betty Little, R-Queensbury, and Assemblyman Joseph Morelle, D-Irondequoit, which would permanently reauthorize the IDA financing for nonprofi ts. They oppose a rival bill (A-8703) sponsored by Assemblyman Sam Hoyt, D-Buffalo, and passed by the Assembly, which would require that prevailing wage rates be paid on IDA projects. Bray and others said this would drive up costs and make some projects unaffordable.
    Gillen, who was not at the news conference, declined to get into the issue of which bill is better but said the authorization for nonprofits to participate in IDA projects needs to be restored.
    But Jobs for Justice, a laborbacked pressure group, issued a statement backing the Hoyt bill.
    The news release quoted James Parrott, chief economist of the Fiscal Policy Institute (another labor-backed organization), as saying: “Research has demonstrated that prevailing wages do not raise construction costs and living wage standards lead to higher skill levels, higher productivity, and lower costs overall. A better skilled workforce is the key to our future and wage standards are the starting point.”
    Sadaf Khatri, program director for New York Jobs With Justice, said there is currently no Senate sponsor for the Hoyt bill but last year’s version of the legislation was sponsored by Sen. George Maziarz, R-Newfane. It did not come up for a vote on the Senate floor, she said.
    A 1986 federal law made nonprofits eligible for IDA funding. The state passed enabling legislation that year, but it expires periodically.
    The Jobs With Justice statement said New York IDAs “awarded over $450 million in tax exemptions in 2006 alone to companies promising to create jobs and spur economic development in the state’s regions. However, one in every five dollars spent by IDAs went to projects that were failing. In addition, the jobs that are created by IDA projects are often lowwage, poor quality jobs — and frequently they go to out-of-state workers.”
    The release said legislation should include “prevailing wage and living wage requirements, as well as measures to increase accountability and transparency among IDAs.”

http://www.timesunion.com

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Critics say IDA impasse harmful
Nonprofit, business groups say delay in making changes is drag on state's economy

By CHRIS CHURCHILL, Business writer
First published: Wednesday, May 14, 2008

ALBANY -- A coalition of nonprofit and business groups on Tuesday said the ongoing impasse over revamping industrial development agencies is hurting the state's economy.
     
The groups urged the quick passage of a measure that would again allow IDAs to issue tax-exempt bonds on behalf of nonprofit groups and others seeking to build so-called civic facilities.
IDAs have been unable to do so since the end of January, when a legislative stalemate over the future of the agencies led to the expiration of a provision allowing them to assist the civic groups, as they have long done.
The groups say the stalemate is delaying construction projects statewide, causing a drag on the economy.
"We ought to be creating opportunities for development, not putting barriers in place," Carl Young, president of the New York Association of Homes and Services for the Aging, said Tuesday.
Young spoke at a Capitol news conference designed to pressure lawmakers into action.
The hundreds of IDAs statewide are essentially two-headed beasts. They give tax breaks to private developers as a way to increase the state's employment base. They also provide tax-exempt bonds for nonprofits like hospitals, nursing homes and colleges.
The tax breaks to private developers are controversial, with critics claiming IDAs give to undeserving projects and are free from oversight; almost no one argues the help for nonprofits should end.
But as debate swirls over how best to change the way IDAs help private developers, the state's nonprofits are caught in the middle.
They could go to private lenders for construction money, but they would lose the tax exemption and add significantly to the cost of their projects.
Albany Medical Center is among the nonprofit entities affected by the impasse. The hospital, which did not participate in Tuesday's news conference, expected to use IDAs this year to fund nearly $12 million in renovation projects.
"If we have to go to alternative sources, it will end up costing us more money," said Greg McGarry, a spokesman for the hospital.
McGarry said Albany Med will not delay the projects, however, and he was unsure how much more the hospital would have to pay.
The last legislative action on IDA overhaul was in January, when the Assembly passed a bill that would impose sweeping changes to the way the agencies operate.
The bill would require more financial disclosure and require builders who receive help to pay workers a so-called prevailing or union-scale wage.
Assemblyman Sam Hoyt, D-Buffalo, sponsored the legislation, which he said aims to "shine light on their activities" and make them "more successful, more accountable and more careful with the taxpayers' money."
Business groups, and many Senate Republicans, object to the bill, saying it will increase construction costs for IDA-sponsored projects. They say it would offset any benefits IDAs could offer.
Chris Churchill can be reached at 454-5442 or by e-mail at cchurchill@timesunion.com.

I personally believe that the IDA should be for just what the initials stand for...INDUSTRIAL DEVELOPMENT!!!! And it should be available for NEW industrial development only, to lure NEW businesses into the area. There are existing businesses that use the IDA over and over and over every few years for revamps, updates & expansions and end up NEVER paying their fair share in taxes. We, the taxpayers end up paying for their tax benefit.

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The bill would require more financial disclosure and require builders who receive help to pay workers a so-called prevailing or union-scale wage.

There are no prevailing wages, just prevailing taxes and the monkey on our backs in NYS.....there are hands held out waiting for the waterfall of cash-ola.......