N.Y. Law Allowing IDAs to Sell Debt For Nonprofit Facilities Set to Expire Again

The law that enables New York industrial development agencies to sell bonds for nonprofit civic facilities will expire tomorrow at midnight, a key Assembly proponent of IDA reform said yesterday.

“It will expire,” said Assemblyman Sam Hoyt, D-Buffalo. “We will have an undefined, undetermined period of time where the civic facilities and the [continuing care retirement communities] and nonprofits will not be able to go forward with projects.”

The law expired for about two and a half weeks in July when the Assembly and Senate failed to reach a compromise before the end of the legislative session. A short-term compromise ultimately extended the law until January 31, 2008.

“I wish that by now we would be celebrating the victory of a compromise,” Hoyt said.

Gov. Eliot Spitzer’s office held three-way talks between the Assembly and Senate on Friday but did not present a proposed bill. Hoyt and Sen. Elizabeth Little, R-Queensbury, both said within the last two months that they were looking to the governor’s office for direction on this matter. Repeated calls yesterday to the division of budget were not returned by press time.

“It’s just going to expire and hopefully that will be the impetus that will bring people to the table,” Little said.

The main sticking point has been a provision in an Assembly bill requiring beneficiaries of all IDA financings to pay prevailing wages for construction of their bond-financed projects. Last year the Assembly passed a wide-ranging IDA reform bill but the Senate offered a more modest reform bill, which that did not include the prevailing wage provision. The Assembly again passed a similar IDA reform bill last week and sent it to the Senate.

Citing a prevailing wage study released on Monday, New York Economic Development Council executive director Brian McMahon said the prevailing wage requirement would increase the cost to projects by 30%.

“Some want to impose significant new wage requirements on projects financed by IDAs and others realize that would be a significant cost increase for projects, especially in Upstate New York,” McMahon said. “It would be a 30% tax on employers.” The council, a trade group for state IDAs, commissioned the Center for Government Research to do the study.

Sadaf Khatri, lead researcher at New York Jobs With Justice, a pro-union organization, said that the prevailing wage issue is vital because the state “shouldn’t be subsidizing poverty-wage work.”

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