Prevailing Wage Bill Would Deliver Devastating Blow to LI Economy

prevaling wage blog imageA bill has passed the New York State Assembly and is now sitting in the State Senate (A1261/S1947) that would require all Industrial Development Agency (IDA) funded projects to pay “prevailing wage.”  The bill is co-sponsored by State Senators James Gaughran and Monica Martinez.

While we appreciate the good intentions of the bill’s supporters, it must not pass. The bill’s adoption would deliver a devastating blow to future economic growth in Suffolk County. In addition to inhibiting the creation of new manufacturing enterprises, this radical change in IDA guidelines would also suppress the introduction of new housing into our region, including affordable housing.

Over the course of 41 years, HIA-LI has grown to represent tens of thousands of Long Island business professionals. We serve as a widely recognized advocate for regional development. It is our core mission.

A centerpoint of our constituency is the Hauppauge Industrial Park, which ranks second in size only to Silicon Valley among America’s industrial parks. This 1,400-acre Park houses more than 1,350 businesses employing some 55,000 people. These workers collectively represent a post-tax payroll accounting for more than $2 billion in local spending. Many of our projects have benefited from IDA support.

More broadly, the Suffolk IDA plays an essential role in Long Island’s economy. It has been a vital economic development resource with an excellent record of success helping local companies expand or renovate, build or add new facilities, or relocate to Suffolk County.

In the Town of Smithtown alone, the Suffolk IDA has been instrumental in the delivery of 34 projects – 13 ground-up developments among them. Most of these IDA projects have been situated in the Hauppauge Industrial Park. Townwide, they are helping to create 4,624 jobs and leverage more than $322 million in private capital.

A new prevailing wage provision is expected to shoot average IDA projects skyward by as much as 40 percent. Such a surge will instantly transform this new requirement into nothing short of a deal-killer for vast numbers of new developments. Contrary to the feelings of some lawmakers this bill will not increase the salary of construction jobs but will decrease the availability of jobs. This would not only stymie the creation of tens of thousands of permanent jobs and construction jobs but would also suppress creation of the kind of workforce housing that allows Long Island to allure and retain skilled personnel including millennials.

Over recent years, New York State witnessed the way that a new prevailing wage requirement had choked off the pipeline of IDA projects in Ulster County and the City of Yonkers. That same harmful scenario would surely play out here, too.

Our analysis is clear: imposing these onerous new costs on future IDA projects would severely diminish Long Island’s competitive status – and badly dampen our hopes for the future.

We urge our State lawmakers to reject this unsustainable new burden on our region’s economy.

Public Officials Talk Business Growth

From left: HIA-LI Board Chairman Joe Campolo; State Assemblyman Michael Fitzpatrick, Smithtown Town Supervisor Ed Wehrheim; Suffolk Presiding Officer DuWayne Gregory; HIA-LI President & CEO Terri Alessi-Miceli; Islip Town Supervisor Angie Carpenter; and, Congressman Lee Zeldin.

Public policy has a major impact upon whether our businesses become profitable and whether our organizations succeed. That’s why HIA-LI regularly brings our members face-to-face with elected officials to discuss issues of concern to the Long Island business sector.

In this spirit, the HIA-LI convened our Annual Meeting and Legislative Breakfast on Friday, January 18 at the Hamlet Golf & Country Club in Commack.

Moderated by Board Chair Joe Campolo – Managing Partner at Campolo, Middleton & McCormick, LLP – the discussion focused on business climate issues, housing, taxes, and other topics.

Panelists included Congressman Lee Zeldin, Assemblyman Michael Fitzpatrick, Islip Town Supervisor Angie Carpenter, Smithtown Town Supervisor Ed Wehrheim, and Suffolk County Legislature Presiding Officer DuWayne Gregory.

Congressman Zeldin and Legislator Gregory cited higher education’s role in sustaining economic growth. “Unemployment is at an all-time low,” the Congressman said, “but a skills gap still exists.” He said Long Island needs a “technical training route” for non-college-bound students.

Presiding Officer Gregory praised Suffolk County Community College for “helping companies fill the skills gap.” He advocated for greater emphasis on STEM learning (science, technology, engineering, and mathematics) to help ensure the competitiveness of our regional workforce.

Supervisor Carpenter praised the Town’s Industrial Development Agency (IDA), noting its high level of accountability because the Town Board also functions as the IDA Board. She pinpointed Castella Imports of Brentwood as a big IDA success story in the Town.

Assemblyman Fitzpatrick said that high taxes – elevated by public sector pensions – have triggered out-migration from Long Island. “If government were smaller,” he said, “and pension costs were lower, we’d have a lower tax burden.”

As an economic development strategy in the Town of Smithtown, Supervisor Wehrheim reported that the Town is now situating workforce housing within business districts. Last summer, site plans were approved for such developments in Smithtown and Commack totaling 154 new units.

In today’s intensely competitive marketplace, the public and private sectors must collaborate and cooperate. Our Annual Legislative Breakfasts help bolster this essential, symbiotic relationship.

Thanks to everyone who helped make this breakfast event a success!

Working Closely with our Government Partners

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From left: Hon. Phil Boyle, State Senator; Terri Alessi-Miceli, President & C.E.O., HIA-LI; Hon. Lee Zeldin, Congressman; Hon. Michael Fitzpatrick, State Assemblyman; Jack Kulka, Lifetime Board Member, HIA-LI; and, Joe Campolo, Board Chair, HIA-LI.

HIA-LI has always prided itself on having outstanding relationships with government officials. Many of our elected and appointed leaders have supported the HIA-LI throughout the years and at critical times have been just a phone call away.  That is something we, and our members, very much appreciate.

It has resulted in numerous projects and improvements such as:

  • A new highway exit off the Northern State Parkway.
  • Securing a COPE patrol vehicle dedicated to the Hauppauge Industrial Park through the Suffolk County Police Department.
  • Establishing the first childcare center in an industrial park on Long Island.
  • Obtaining a $600,000 transportation grant from former Congressman Steve Israel to look at egress and digress in the Park.
  • Establishment of an overlay district that allows for increased building height.
  • Expansion of the Park’s sewerage project.

All of this and more has happened because of our strong relationship with government officials.

On October 19, 2018, we took another important step in our advocacy and partnership with local and regional public officials by hosting a Board Legislative Breakfast where more than two dozen elected leaders and their representatives attended.  HIA-LI understands the importance of communicating our members’ concerns to governmental leaders and the benefits of working with them in a collaborative manner to find solutions.

At the October 19 breakfast, Joe Campolo, Board Chair and Managing Partner of Campolo, Middleton and McCormick LLP, reviewed the proactive work being done in the Hauppauge Industrial Park and the “Opportunity Analysis” that this is being conducted to help identify ways that the Park’s economic power can be channeled to maximize its contribution to Long Island’s long-term growth and competitiveness.

Scott Maskin, HIA-LI Board Member and Co-Founder of SUNation Solar spoke about the progressive work being done with our Solar Initiative.  There are 20 million square feet of unused rooftops that can be utilized as a solar asset, helping to lower energy costs for businesses while increasing the quality of our environment.

Rita DiStefano, HIA-LI Board Member and HR Consultant for Portnoy, Messinger, Pearl spoke about the urgency to continue helping small businesses via our Small Business Task Force. Since more than 80 percent of HIA-LI member companies are considered small to midsize businesses, this is another critical step for us. We realize that small business doesn’t have the bandwidth that larger companies have and the open forums this task force has created can help them lead and grow their organizations.

HIA-LI continues to be a catalyst for change, and I feel blessed to be leading an organization that has not only has its heart and footprint in the Hauppauge Industrial Park but across this bi-county region.