GOVERNOR PATERSON ANNOUNCES WICKS LAW OVERHAUL

Governor David A. Paterson today announced the overhaul of the Wicks Law in the 2008-09 Enacted Budget. This historic reform is part of an overall effort to reduce local mandates and lower local property taxes. The change, which will cut public construction costs for State and local governments, marks the first restructuring of that law in more than 40 years.

“Wicks reform is an essential part of relieving the crushing burden of local property taxes afflicting our State,” said Governor Paterson. “Today’s reforms, which were many years in the making, prove that when we work together, we can get real results for the people of New York.”

Under the legislation, the thresholds for triggering Wicks Law mandates, which require State and local governments to issue multiple construction contracts for most public works projects, will be increased to $3 million in New York City, $1.5 million in the downstate suburbs, and $500,000 Upstate. This will mean a 60-fold increase in the current threshold in NYC, a 30-fold increase in downstate suburbs, and 10-fold increase for Upstate. The prior $50,000 threshold, which was in effect before these reforms were adopted, dates back to 1961 for state contracts and 1964 for local government contracts, and had never been adjusted for inflation.

Contracting entities will be able to avoid the Wicks Law requirements through use of project labor agreements. At the same time, subcontractor protections will also be strengthened to ensure that employees on public works projects are treated fairly and that the original intent of the bill – to protect subcontractors from bidding fraud – remains intact.

These reforms will exempt more than 70 percent of public works projects from Wicks mandates and provide real savings for schools, local governments and other public entities. For New York City, this legislation will reduce the City’s long term capital construction costs by more than $200 million in its upcoming City Fiscal Year (CFY) 2009 Capital Plan, and will carry annual debt service savings of $14 million by CFY 2012. Localities across the State will also realize millions of dollars more in savings.

Other efforts in the Enacted Budget which will help relieve pressure on local property taxes include:

• Aid and Incentives for Municipalities (AIM): Municipalities outside of New York City will receive $767 million in total AIM funding, a $67.5 million (9.7 percent) increase from last year. This includes the $55.9 million in additional aid proposed in the original Executive Budget plus another $11.6 million in new special assistance for certain cities. Notable changes include: Buffalo (10.8 percent); Rochester (17.4 percent); Syracuse (10.8 percent); Albany (13.3 percent); and Binghamton (10.8 percent).
• Local Government Efficiency Grants: The Enacted Budget includes $29.4 million in grants to encourage local government consolidation and shared services, a $4.4 million increase from last year.