RBA Continues Efforts to Repeal New York's Costly Wicks Law
February 13 , 2006
by Dylan Skriloff
The Wicks Law, one of New York State’s most controversial and costly mandates, is up for debate this legislative session.
The law states that municipalities must use four contractors on any public building project over $50,000, a threshold that has not been adjusted for inflation since 1964. One general contractor and separate contractors for plumbing & gas fitting, heating & ventilation and electric wiring are required.
According to a 1987 study by the New York State Division of the Budget the law costs New York $300 million a year. It costs in a variety of ways including the administrative burden of preparing and bidding at least four individual contracts for each project. Even small projects can create a review process that involves the state attorney general and comptroller.
"The Wicks Law is a New York oddity. A needless and costly obstacle that every municipality must contend with, ultimately costing the taxpayers and the economy millions of dollars every year," RBA CEO and President Al Samuels said.
"I truly hope this is the year that both the Wicks Law and the Scaffold Law, the other infamous law that drives up construction costs in the State, are finally reformed or repealed altogether," Samuels added. To that end, the RBA is continuing it’s advocacy effort to repeal Wicks. It will be an issue brought to legislators’ attention on Small Business Day, March 29 in Albany.
The original intent of the law, which dates back to 1921, was to prevent corruption in construction bidding. But opponents of the arcane mandate claim it increases the costs of construction work and makes the process more cumbersome. Estimates of how much Wicks adds to the cost of project vary, but some say it can add as much as 30%.
Some small contractors and unions are avid defenders of the law. They claim they’d have to subcontract for general contractors were the law repealed.
"The bottom line is the building trades want it in there," said Gary Olsen government affairs director for the General Building Contractors of New York State, which opposes the Wicks Law. "And the building trades are very influential in New York state."
The closest parties had come to an agreement to reform Wicks was the 1995 legislative session, when lawmakers and interested parties stayed in a room until 3:00AM and hammered out a compromise. Certain Pro-Wicks interests did not find the agreement protected them and the agreement collapsed.
Comments from Joseph B. Rose,
former Executive Director of Citizens Housing and Planning Council
This is not a new issue. Reform advocacy dates back many years and have been supported by both Governors Cuomo and Pataki. In 1992, Joseph B. Rose, then executive director of the Citizens Housing and Planning Council of New York City wrote in a City Journal article that the Wicks Law had on many occasions caused extensive and expensive hold ups in major city works projects. Contractors would often squabble over territorial issues or hold the city up for more money, because under Wicks they have leverage to sue if their contract is terminated.
Rose wrote in the article that, "The Wicks Law causes the hemorrhage of public funds by preventing public construction projects from being efficiently managed. Normally, when a private developer plans a building, he hires a general contractor to deliver a finished project for an agreed-upon price. The general contractor then hires subcontractors with particular expertise in specialized construction tasks such as plumbing or wiring. The general contractor supervises the subcontractors, making sure their work is properly coordinated, on time, and up to specifications."
He continued, "The Wicks Law requires that government agencies in New York State (except some state and local authorities, which are exempt) directly hire four separate contractors for general construction, plumbing, electrical work, and heating and ventilation. No contractor has authority over the others, so government officials must then try to coordinate the various contractors. The result [can be] chaos. In one notorious incident, an entire public housing project was delayed while two contractors argued about whose job it was to sweep the floor."
New York Has Most Mandates
New York has more legislative mandates for how localities conduct business than any other state in the union. In total there are over 2,600 mandates, regulating everything from how you move a water heater in a public building to the aforementioned Wicks Law. For years efforts to confront the issue have fizzled. Gannet news reporter Gary Craig explained it this way in a news article posted on the Marist College website.
"Each year the legislative fandango follows the same steps. Local officials carp that mandates are overwhelming their ability to provide services and keep taxes in check. State lawmakers appear attentive. The governor, whether George Pataki or his predecessor, Mario Cuomo, makes overtures to mandate relief. Some bills are introduced to ease mandates. Many die a quiet death in committee. Others gain slight momentum, only to be ignored or forgotten in the whirlwind of activity—usually the resolution of the budget battle—at session's end," Craig wrote.
"In our state it seems everything gets done at the last minute or in the last weeks of the session," said Bill Pape, spokesman for the New York State School Boards Association (NYSSBA), quoted in Craig’s article. "In that hurly-burly activity, a special interest can often apply a very specific pressure to stop something. It just gets submerged, and no one notices it."
