Assembly Minority Leader Brian Kolb: Governor Paterson’s Delaying Payments To Construction Contractors Means Less Jobs For New Yorkers, Dangerous Roads And Bridges For New York Motorists

Kolb and Assemblyman David G. McDonough say Governor’s decision to stop payments to construction contractors already is costing state hundreds of jobs as businesses have begun laying off workers, could put 5,000 jobs in New York at risk
April 14, 2010

(Albany, NY) – Governor David Paterson’s controversial decision that stopped state payments to construction companies will result in fewer jobs for New Yorkers and could mean fewer safe roadways and bridges for New York motorists, said Assembly Minority Leader Brian M. Kolb (R,I,C-Canandaigua) and Assemblyman David G. McDonough (R,C,I-Merrick), the Ranking Minority Member on the Assembly Transportation Committee. Kolb and McDonough called on the Governor to re-think his policy that already has cost hundreds of jobs – and could put 5,000 jobs in New York at risk, according to the General Contractors Association of New York State, Inc.

Governor Paterson effectively halted state spending for any new or continuing construction projects in his emergency budget extender enacted after the Majorities in the Assembly and Senate failed to pass the 2010-11 State Budget by New York’s April 1 fiscal deadline. The Governor’s second emergency budget extender, passed Monday afternoon, also did not include any state funding for new or ongoing construction projects.

In response to the delay in payments, work on over a dozen construction projects is temporarily on hold. Additionally, some contractors have been forced to lay off workers due to insufficient funds to meet payrolls and are discussing taking legal action against the state if money is not restored and the contracts honored. All told, over $600 million in construction projects are currently on hold, with more notifications and layoffs expected this week.

Some of the many affected construction projects and regions impacted by Governor Paterson’s decision to freeze payments include the following:

  • New York City: Alexander Hamilton Bridge, $400 million rehabilitation project;
  • Long Island: Work on the Route 110 overpass;
  • Westchester County: $160 million contract, including modifications to I-287;
  • Clinton County: $1.2 million contact, including repairs to Route 9;
  • Orange and Putnam counties: Bridge and infrastructure repairs; and
  • Monroe County: Renovation of Route 31F.

“At a time when our state has over 800,000 people out of work, it makes little sense to compound the problem by making even more New Yorkers jobless. This was just one of the many consequences of Governor Paterson’s decision to freeze payments to construction contractors and an example of making a bad situation worse through ‘governance by crisis management’ – only in this case, it seems like all crisis and little governance,” Kolb said.

“Governor Paterson’s decision to stop state payments for projects which already were promised and funded in last year’s budget to construction contractors has real consequences for real people. Every day the funding is delayed means another New Yorker out of work and our roads and bridges not receiving the careful attention and repair they desperately need,” McDonough.

“Long Island contractors already are paying a steep price for the Governor’s costly policy. It is no exaggeration to say that New York State could lose thousands of jobs all because the Governor decided to target construction contractors. This was a decision that the Governor made unilaterally, without seeking our input or advice. While the decision may have occurred in a vacuum, its direct consequences will impact Long Island and all New Yorkers and have the net effect of increasing unemployment. I am going to continue doing everything in my power to get the Governor to reverse course and restore this state funding that is rightfully owed to construction contractors,” McDonough stated.

“What remains of enormous concern to the taxpayer, the construction industry and the state’s business owners is the idea that our public infrastructure can be held hostage over a partisan dispute that is focused on our state budget. It is unconscionable and we believe it is illegal. The construction industry will hold Albany accountable for this action. The voters will do the same,” said Marc Herbst, Executive Director of the Long Island Contractors’ Association, Inc.

“The solution to this problem is passing a state budget,” said Denise Richardson, Managing Director of the General Contractors Association of New York. “At a time when New York City already is struggling to absorb the impact of the financial industry’s job losses, the closing of St. Vincent’s Hospital and the downturn in residential and commercial construction, the decision to stop payments on the state’s road and bridge construction projects will only deepen our economic woes. We remind all legislators and the governor that if people do not have jobs, they do not generate the income taxes that the state’s long history of excessive spending relies on. It is time for the governor and the legislators to get serious, get the state’s spending under control, and pass a responsible budget.”

“Refusing to pay contractors for completed work is a precedent that will cost taxpayers tens of millions of dollars in future contingency costs. Businesses will fail. Workers will lose their jobs and the state’s economy will suffer terrible damage. It is a disgrace and in the end a very costly miscalculation of the final outcome,” said Ross Pepe, President of the Construction Industry Council of Westchester and the Hudson Valley.

“I applaud Assemblyman Kolb’s efforts to protect us here in Western New York. And it’s about time that someone stood up for the industry – the businesses that will be hurt by this action and the working families who will be devastated by the Governor’s action. Solving the State’s mismanagement problems on the backs of workers in the construction industry is appalling at best – criminal at worst,” said Kenneth L. Warner, Executive Director, UNICON – Unions and Businesses United in Construction.

“The Governor’s stated intention for delaying these payments was that our state faces a looming cash crunch. If this is indeed the case, then why isn’t the Governor meeting in public with all the Legislative Leaders and asking for real solutions as I have continually called for? Decisions that result in more New Yorkers out of work, and leave our roadways, bridges and other critical infrastructure less safe, will not achieve the types of systemic changes needed to bring the state’s budget back into balance,” Kolb stated.

“What is particularly frustrating for many contractors is a feeling that the Governor’s decision appears arbitrary, especially since last year’s State Budget already paid for these projects. It is as if taxpayers are being asked to pay for infrastructure projects twice,” Kolb said.

“It is clear that the damage caused by hundreds, possibly thousands, of working New Yorkers being laid off and our roadways and bridges falling into further disrepair warrants Governor Paterson’s reconsideration of his ill-advised decision. Construction contractors did not cause the state’s financial problems – years of fiscally irresponsible taxing, spending and borrowing policies did. Our state government cannot balance its books on the backs of private sector employers, construction workers or at the expense of motorists’ safety. The Governor needs to remove the hold on state funding to construction contractors so all of these stalled projects can move forward,” Kolb concluded.