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Editorial: Prevailing wage proposal is a knife at the throat of region’s economy

Albany is coming down with a case of schizophrenia.

Under the leadership of Gov. Andrew M. Cuomo, the state has been a good friend to Western New York over the past eight years. With projects and policies that have helped juice the regional economy, Albany has played a leading role in reviving a long-stagnant city and region.

Now, it wants to put pillow over our face.

Under Democratic dominance, the State Legislature is poised to impose a prevailing wage law covering all of New York and requiring any project benefiting from any amount of public money or incentive to pay higher wages and adopt more costly work rules than would otherwise be required. The policy, contractors and other say, would make many projects unaffordable and risk smothering the economic progress being made in Western New York.

Discussions on a prevailing wage measure have been underway as part of the state budget, though it’s possible the subject will be taken up later in the session. Critics expect that some law will eventually pass and are hoping to shape it in a way that acknowledges the differences between the downstate economy and the rest of New York.

As always, politics are involved. Trade unions whose members would benefit from the law are pushing for it as payback for their efforts in helping Democrats take over the State Senate. But it cuts both ways, as the legislation law could disproportionately harm minority contractors for whom the increased costs would likely be prohibitive.

Interestingly, leaders of the Buffalo Niagara Partnership say, the state is tacitly acknowledging the damage a prevailing wage law could create through its consideration of a carve-out for affordable housing projects. The conclusion is unavoidable: If a prevailing wage law is not harmful to construction projects, why is a carve-out needed? If it is harmful, why hold the knife to Western New York’s throat?

And it will be harmful. Projects in Western New York frequently rely on public incentives. Construction in brownfields, of which this region has a surplus, requires government help to make them happen. Historic tax credits have been similarly essential to many projects in and around Buffalo. Industrial development agencies are in the business of attracting companies with public incentives.

Those incentives are needed because the costs of doing business in high-tax, over-regulated New York are out of line with other states. Without discounting those problems, the state cannot compete. It is out of the game.

And yet, here comes a law that will move the state in exactly the wrong direction, diminishing the value of necessary public incentives by raising the costs of construction.

Thanks for that.

It’s hard to escape the notion that much of the momentum behind this push comes from downstate, which dominates the Legislature and all but one of the government’s statewide elected posts. Although New York City’s gravitational pull has diminished in the internet age, it remains an economic outlier in the state, able to withstand pressures that could crush other regions. That’s what a careless prevailing wage law could do to Buffalo and Western New York.

The only good news in this is that Gov. Andrew M. Cuomo, although making mention of a prevailing wage law in his January budget address, has not made it a priority. He needs to hold the line on it, to protect the investment of public money he has already made in Western New York though the two Buffalo Billion programs.

If Albany is determined to impose this law, it needs to do so in a way that distinguishes the impact it will have on those parts of the state that aren’t Manhattan or its immediate surroundings. Better yet, instead of threatening the still-precarious economy of Western New York, it should just leave matters alone.

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