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Changes in Wicks law shortchange upstate, critics say Law blamed for increasing cost of public projects

A union-backed law that drives up the price tag of public construction projects, from schools to jails, will see its first major change in four decades under a deal struck Thursday by Gov. Eliot Spitzer and legislative leaders.

While Spitzer called the changes to the Wicks law "significant," upstate business leaders condemned the deal, saying it is more heavily weighted to benefit New York City and includes other new mandates that will keep driving up the cost of public construction projects. That, in turn, helps to fuel property tax increases, they said.

"If this is a deal, it's somewhere between inadequate and insulting to upstate," said Andrew J. Rudnick, the president of the Buffalo Niagara Partnership.

The Wicks law for years has been a favorite target of business groups, which say it represents an outdated mandate -- the only one of its kind in the nation -- that sends public construction costs spiraling by as much as 30 percent.

Backed by unions and originally intended in 1921 to prevent corruption in the construction industry, the Wicks law requires hiring four separate contractors -- from plumbing to electrical -- on public projects valued at more than $50,000, a level that has not changed since the early 1960s. With inflation, almost all public building projects in New York are covered by Wicks, though schools in New York City were specifically exempt from the law.

The new deal increases the threshold from the current $50,000 to $500,000 for upstate projects before the Wicks law kicks in; $1.5 million for projects in the metropolitan New York area; and $3 million for New York City projects.

Spitzer said the changes will exempt more than 70 percent of public works projects, and he said it will especially target lower-priced projects, such as new lighting for a school gym or sidewalk work outside a government building, "where the greatest harm is felt by virtue of Wicks."

"This is an important step forward. Is it a perfect bill? No bill is perfect, but it is an important bill and one that will generate significant changes for many municipalities," the governor said.

The agreement offers less for upstate and more for downstate than what Spitzer proposed on the campaign trail. Last year, he called for raising the Wicks threshold to $1 million for upstate and $2 million for New York City.

The new deal puts the New York City threshold six times higher than the upstate level, although construction costs are that much higher in New York City than upstate.

The upstate thresholds were fought by construction unions, which have considerable sway in Albany. Senate Majority Leader Joseph Bruno called the numbers chosen by the agreement "arbitrary" and said most public projects will still end up being covered by Wicks, a claim disputed by Spitzer.

The Senate had originally proposed repealing Wicks, but then backed off that idea earlier this year. Asked why Wicks could not just be eliminated, Bruno said, "Because it's too controversial."

The reaction from the different sides told its own story. Denis Hughes, the politically potent president of the state AFL-CIO, said the new deal includes important protections for subcontractors to protect them from being taken advantage of by contractors on public projects.

The deal also includes a "project labor agreement" provision that allows an upstate public project to be exempt from Wicks requirements if certain union hiring concessions are made.

Hughes said he had not seen the final deal, but said, "It sounds like it's a good deal for all."

Officials with public schools, which led much of the fight for a repeal of Wicks, called it "a good first step."

"We wanted much more than this," said David Little, government affairs director with the New York State School Boards Association. "We remain disappointed that the trade unions continue to exert tremendous pressure at the expense of taxpayers and this pressure precluded more significant reforms." He said a top aide to Spitzer promised his group the Wicks law would be revisited again for a more comprehensive deal.

Critics said the new $500,000 threshold is not as helpful as portrayed because many projects under that amount would not have fallen under Wicks anyway. They note that, despite Wicks, a lighting job at a city building costing $100,000 would not have to include a separate contract for, say, plumbing work.

Critics said the deal also includes a requirement that contractors have apprentice programs, which Rudnick called "discriminatory" against many women and minority-owned businesses that are often smaller in size, not unionized and can't afford such programs.

"There's nothing about this bill that we like and there's nothing about the way the bill came together that we like because it was negotiated with the building trades and not the business representatives of the upstate economy," Rudnick said.

Sandy Parker, president of the Rochester Business Alliance and a founder of the Unshackle Upstate group, criticized the agreement as falling short of what is needed to help the upstate economy. At the very least, she said, the group was hoping for higher threshold levels in upstate metropolitan areas.

"I'm extremely disappointed,'' Parker said, who said the thresholds are too low and the split between upstate and downstate too "extreme" at a time when upstate property taxes are helping to drive businesses and residents away.

"All of us came out in strong support of Eliot Spitzer because we thought he was going to focus his efforts on upstate. We're disappointed on this one," Parker said.

Supporters said the new upstate $500,000 threshold is 10 times higher than current levels and will relieve local governments and school districts from a whole range of construction projects that now fall under the costly Wicks law.

"But 10 times nothing is still hardly anything,'' said Assemblyman Robin Schimminger, D-Kenmore, chairman of the Assembly's economic development committee.

Schimminger said there is significance to the deal in that there is a built-in recognition that the state does have different regions that need to be treated differently.

"However, the region that needs the benefit the most and is oppressed by so many state policies gets the short leg of the three-legged stool on Wicks," Schimminger said.


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