State freeze may spur layoffs in construction
RICHMONDVILLE A major employer of Schoharie County residents said nearly 200 of its workers face layoffs as construction funds continue to be left out of the state’s emergency budget appropriations.
Gov. David Paterson has authorized the use of $40 million in federal money for certain construction projects, but state funds for such work have been frozen.
Mark Galasso, president of Lancaster Development in Richmondville, said Friday 30 employees who went without work during the winter did not get called back just as the construction season began this month. An additional 150 employees may lose their jobs in the coming weeks as projects are shut down due to the budget stalemate in Albany, he said. The next session for the New York State Legislature convenes at 3 p.m. Monday.
“The decision by the state to withhold contract payments is forcing construction companies to self-finance their projects. Obviously, no company can do so indefinitely,” Galasso said.
New York lost an estimated 5,000 construction jobs in April alone as a result of contractors being unable to afford to bring back their seasonal labor force. Galasso said the domino effect trickles to suppliers, material handlers and the businesses that support workers with food, lodging and other amenities while they are on work sites.
State officials said every $1 spent in the construction industry generates $4 in economic activity in the state.
Galasso joined Assemblyman Pete Lopez, R-Schoharie, and State Sen. James Seward, R-Oneonta, both of whom said the governor and legislative leaders have made no meaningful efforts to save jobs lost due to their inaction.
Seward and Lopez launched a “No Work Here” construction sign campaign designed to create public awareness of the stalled projects that have resulted in a loss of construction jobs.
The signs include several slogans like “Tell Albany’s Three Men To Pass A Budget Now” and “Be Prepared to Lose Your Job.”
As nearly $700 million in construction projects statewide are on hold, Galasso said the state is also trying to deny contractors the interest due to them for being paid late. He explained that the state Department of Transportation is interpreting the state’s “Prompt Payment” law so that interest for the contracted projects should not be applied since legislators have not appropriated funds. Taxpayers would have otherwise begun to pay interest on the projects beginning May 20.
That doesn’t help those contractors that are currently self-funding projects, who continue to work out of concern they will face hefty fines if projects aren’t completed on time.
Lancaster Development must have the road open for its Exit 6 project in Latham by the December deadline or face daily fines of nearly $20,000. The project’s completion is scheduled for 2011, but next year will be spent doing landscaping, planting trees and other cosmetic work, Galasso said.
A rally was held Friday morning on the steps of the Capitol as the state’s Association for General Contractors filed a lawsuit in state Supreme Court over the governor’s payment freeze of approved state infrastructure projects. Former Lt. Gov. Al DelBello represented the AGC in oral arguments in the case Friday.