New York's Lower East Side. Photo by Shutterstock.
Governor Andrew Cuomo and the New York State Legislature have announced the State budget agreement for fiscal year 2021. Does it pass muster for the Real Estate Board of New York? Well, yes and no. In a recent REBNY Watch column, Board president James Whelan details what pleases and perturbs REBNY about the newly announced budget. Chief among his objections is the application of construction "prevailing wage," the pay rate contractors have to offer their employees when doing business with government agencies.
"The new law will require that the 'prevailing wage' be paid projects that are worth more than $5 million and receive at least 30 percent of their financing from public funds," Whelan explained. He called that decision "a mistake," warning that it will impede the creation of new construction jobs.
Whelan went on to say that REBNY is not opposed to prevailing wage in principle, but when it comes to construction prevailing wage in New York City, "the numbers simply do not add up."
Using the example of a typical New York City plumber, Whelan said that metropolitan area plumber costs close to $100,000 a year. However, when New York City prevailing wage rates are applied, "the plumber position costs over $210,000 per year!"
All was not bleak in Whelan's assessment. He stressed the importance of State leaders renewing economic incentive programs like the Relocation and Employment Assistance Program (REAP). Whelan said the program creates nearly 11,000 jobs a year.
"This incentive, coupled with the Industrial and Commercial Abatement Program (ICAP), will stimulate outer borough commercial development," Whelan said. "Additionally, the Energy Cost Savings Program was extended, which reduces energy costs for companies relocating outside New York's central business district." He said the positive effects of those programs "will be felt across the five boroughs."
He also had praise for reforms to the way renewable energy projects were developed, including expediting review and permitting periods for green energy projects to help new solar and wind projects become operational. "These new renewable projects help to meet the State's clean energy goals," he said, highlighting their potential to "creat[e] sustainable jobs for New Yorkers."
Gov. Cuomo announced the 2021 budget on April 2.
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Richard Binder
Richard Binder, based in New York, is part of the social media team at ALM. He is also a 2014 recipient of the ASPBE Award for Excellence in the Humorous/Fun Department.
