New York State Joint Legislative Hearing on Transportation Written Testimony

New York State Joint Legislative Hearing on Transportation Written Testimony
Associated Builders & Contractors, Empire State Chapter
Contact: Tanner Schmidt (585) 730-1814 tschmidt@abcnys.org

Chairman Cooney, Chairman Magnarelli, and distinguished members of the legislature, thank you for the opportunity to provide testimony today.

The Associated Builders & Contractors, Empire State Chapter (ABC), represents hundreds of merit shop contractors employing tens of thousands of workers across New York. Our members are committed to rebuilding and maintaining the state’s critical infrastructure, and we appreciate the Governor’s commitment to transportation investment. However, while this budget proposes continued funding for infrastructure projects, it fails to address the affordability crisis crippling New York’s construction industry and burdening taxpayers.

A 2024 report from the American Road and Transportation Builders Association found that nearly every bridge in New York requires some form of repair, with almost 10% deemed "structurally deficient." The deteriorating condition of our roads is evident to anyone who drives on I-90, and legislators experience it firsthand when traveling from their districts to the state capital. Despite these glaring issues, the state continues to pursue the same failed policies that have contributed to these problems instead of implementing meaningful reforms that would maximize infrastructure investments.

If New York is serious about fixing its roads and bridges, the state must acknowledge that current policies are not working. Chief among them are Project Labor Agreements (PLAs) and prevailing wage mandates, which dramatically inflate construction costs. A 2023 report by Pedestrian Observations found that New York's infrastructure projects, particularly in urban areas like Manhattan, are among the most expensive in the world. The first phase of the Second Avenue Subway in Manhattan cost $2.5 billion per mile, making it the most expensive subway project globally.

PLAs require contractors to hire most of their workforce from union halls—typically three out of every four workers. However, according to the U.S. Bureau of Labor Statistics and the Current Population Survey, 80% of construction workers in New York are not affiliated with a union. This means only 20% of the workforce is eligible to work on PLA projects, sidelining thousands of qualified workers and forcing many contractors to forgo bidding on public projects altogether.

The result is a restricted bidding process that drives up costs. A study by Dr. Paul G. Carr, P.E., from Cornell University, analyzed 125 public works projects in New York and found that reducing the number of bidders by just two increases bid prices by more than 4%. Multiple studies, including those conducted by the Beacon Hill Institute, a research group specializing in economic policy analysis, have found that PLAs can increase total project costs by as much as 20%, making essential infrastructure upgrades even more expensive for taxpayers.

New York’s prevailing wage laws were originally intended to ensure fair pay, but the state’s calculation methods have turned them into a tool that artificially inflates costs. Instead of basing prevailing wages on actual local wages, the state pegs them to the highest union-negotiated rates, resulting in 13% to 25% higher costs, depending on the county.

A recent Empire Center report found that this miscalculation wastes billions of taxpayer dollars annually—money that could be used to fund additional infrastructure projects. A simple, commonsense reform would be to follow the federal government’s model and base prevailing wages on true local market rates, ensuring fair pay while lowering project costs.

New York’s affordability crisis is driving people out of the state. According to a 2024 report from Cornell University's Program on Applied Demographics, New York experienced a net domestic migration loss of approximately 121,000 residents in 2024 alone. The report concluded that if this trend continues, New York’s population could decline by more than 2 million people over the next 25 years—a 13% drop.

This exodus isn’t due to the weather. People are fleeing because Albany’s policies have made New York unaffordable. When infrastructure projects cost 20% or more than they should, taxpayers foot the bill. When high costs force businesses to reduce investments, jobs disappear. These policies don’t just harm the construction industry—they harm every New Yorker.

If the legislature is serious about making infrastructure more affordable and ensuring that taxpayer dollars are spent responsibly, it must take the following steps:

1. End mandates that artificially drive up costs, including PLAs and the flawed prevailing wage system.
2. Promote open competition, allowing the entire skilled workforce—including the 80% of workers who choose not to join a union—to participate in public projects.
3. Adopt a cost-efficient, data-driven approach to infrastructure spending, ensuring that more projects can be completed within budget and on time.

The Governor and legislature have an opportunity this session to implement real reforms that will improve infrastructure, create jobs, and make New York more affordable. Without these changes, we will continue to see deteriorating roads, wasted taxpayer dollars, and a shrinking population.

Thank you for your time and consideration. ABC looks forward to working with you to ensure a more sustainable and competitive future for New York’s construction industry and its residents.