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Negotiation Lessons from the Amazon Deal Blow-Up


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Announcing the Amazon deal (photo: Ed Reed/Mayoral Photography Office)


Amazon’s decision to abandon its planned construction of a major campus in Long Island City has revealed deep fissures among New Yorkers. Typical of news coverage and commentary in these highly-polarized times, discussion of the issue has been framed in largely win/lose terms, both from the perspective of politics (progressives versus pragmatics) and the impact on the New York economy and lifestyle (“more jobs is always better” versus “union-busting vulture capitalist billionaires don’t deserve tax breaks”). As with most stories framed in win/lose terms, the narrative unfolds with heroes, villains, victims, and victors.

Governor Cuomo has said he’s trying to revive the deal. In the context of future conversations between New York State and Amazon, as well as other companies, it is worth exploring some of the common and avoidable negotiation errors that were made the first time around.

First, don’t overestimate your leverage. Amazon’s process for selecting a city for its “second headquarters” seemed to be a picture of its leverage. It used something called a “modified auction,” whereby it set up an obnoxious beauty pageant where contestants could come forward with their goods and where the mega-company was at once judge, jury, and rule-maker.  

City and state governments were invited to make their best offer to the behemoth, complete with outrageous tax incentives, promises of infrastructure improvements for Amazon’s benefit, and even pledges to re-name their city. Amazon then sat back, politely said, “Thanks for your entry” and narrowed the playing field to invite a second round of final “bids.” Only then did Amazon actually sit down for a real negotiation with a few finalists urging them to “sweeten the deal” even further before announcing the pageant winners.

On the surface, the process for Amazon sounds great, if you’re Amazon. But Amazon miscalculated the ill-will that the process itself would engender. First, pitting cities against each other, and then, once in New York, bypassing the local City Council’s approval process, had consequences. This was not a one-off auction for the sale of a Picasso at Sotheby’s. Instead, it was a process about who was going to be Amazon’s next-door neighbor, essential to its business, for the next ten, twenty, fifty years. Amazon’s approach galvanized opposition that might not have existed if it had not used such a power/leverage-based approach to the negotiation.  

Second, don’t forget to manage your “behind-the-table” constituency. Many New Yorkers viewed it as nothing short of miraculous that Mayor Bill de Blasio and Governor Andrew Cuomo, two deeply competitive leaders, came together, joining forces to win Amazon and crush the competing offers. It was equally surprising how these two New York powerbrokers, finally united, could possibly lose the deal. Confident of their ability to deliver and caught-up in the competition between themselves and other bidders, the governor and mayor failed to deliver the “behind-the-table” constituencies on their own side who might seek to block or tank the deal.

Great negotiators are simultaneously negotiating across the table while artfully working to build and maintain supporting coalitions behind the table. They are always seeking to build deals that meet their own interests very well, the interests of the other side at least reasonably well, and the interests of third parties who may not be at the negotiating table but who may have interests in the outcome and power to tank the deal at least well enough to ensure the deal would be durable.

Despite its flaws, the city’s formal and cumbersome land use procedure -- which Amazon sought to avoid -- tends to afford that level of engagement to various groups, and to give them a space to challenge and refine a project rather than to tank it. It’s unclear whether the governor and mayor underestimated the organizing power or will of those who might be upset with the deal, or simply forgot this basic negotiation principle. But in failing to work constructively with various stakeholders who might not have had a seat at the negotiation table but who, when organized, had considerable power to stop the deal’s implementation, the negotiating parties unwittingly turned skeptics into spoilers.

Finally, define “success” based on your away-from-the-table alternative. On the one hand, Amazon’s sudden decision to pull out of the New York deal could be seen as victory for local Queens leaders who opposed it. And certainly, they celebrated its defeat and cheered the power of the people to “take their city back.”

At least in the short term, the leaders may have protected themselves among the most reliable Democratic primary electorate. But in negotiation, it’s important to measure “success” not based on the ephemeral, emotional feel of a “win” in the heat-of-battle, but rather based on whether what you are getting is better than what you are leaving behind. If a deal on the table advances your interests (broadly construed) better than no deal at all, then walking away from the deal is not a good outcome, even if it makes you feel good in the moment or if you believe it may help you in the next election.

In this case, the deal was far from perfect for New York or its workers. The city and state had offered $3 billion in tax and other incentives, plus a helipad, to a huge company whose owner is one of the richest men in the world and bypassed the City Council’s entire land use process while doing so. The company refused to provide guarantees around not opposing union organizing, and would have created a significant burden on local transportation, schooling, and other infrastructure.

Could a better deal have possibly been negotiated? Yes. However, it is also the case that the deal that was negotiated would have likely brought in $27.5 billion in tax revenue to New York over 25 years and approximately 25,000 new jobs in the first ten years alone. Of course, these are estimates, but even if they are remotely accurate, the upsides of this deal seem to outweigh no deal by a wide margin, especially since there is no immediate back-up plan to generate revenue or jobs at anywhere near this scale.

While it is clear that individual elected officials believed there was significant political upside to derailing the deal, it’s hard to see how Amazon’s abrupt withdrawal is a win for the people of New York, at least vis-à-vis the no-deal alternative. And yet, parties often reject deals that are better than their no-deal alternative because they allow emotions to escalate, and do not measure success in relation to what no deal would get them.

Not all negotiation errors are avoidable. But these were. When leaders focus on leverage, ignore the creation of possible blocking coalitions, and let emotions get the best of them, even seasoned and sophisticated negotiators will end up with less-than-optimal outcomes. Because the entities in play are one of the world’s greatest cities and one of the most prosperous and growing companies in the world, all involved will survive, even thrive, over time. But from a negotiation perspective, it’s hard for us to look at the outcome as anything but a loss and a missed opportunity for all.

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Robert C. Bordone is the Thaddeus R. Beal Clinical Professor of Law at Harvard Law School, and Daniel R. Garodnick is a former New York City Council member, where he chaired the Economic Development Committee. On Twitter @bobbordone & @DanGarodnick.

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How to Expand Opportunity in Construction for Those Left Behind


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(photo: governor's office)


A lot has been made of the disagreement between open shop contractors and union trades over decisions by owners of private projects to supplement select trades. But where others get lost in conflict, I see opportunity. 

In many cases, open shop labor, machine operation, and some carpentry services are integrated to perform certain work, including safety and general condition services. But for many owners and construction managers, the reality is that most of the work on open shop projects is actually performed by union trades – and that is a problem. We have seen certain "progressive" trades using work rules and wage concessions to their benefit. As a result, these trades often have an advantage in being awarded construction contracts. And in this one-sided system, certain unions have been able to maintain and in some cases expand their market share.

Despite the odds stacked against us, open shop companies have been able to preserve a competitive advantage in a small number of trades, including labor, where the cost of doing business with a union shop is double. Due to issues including multi-trade and minimum manning requirements, union companies charge a whopping 20% more for services such as superstructure concrete. And to that end, broad-banding -- a classification system based on certifications and skill levels -- has made open shop contractors more competitive, while giving their employees an opportunity to learn a wide range of skills.

While the rules are written to work against the open shop model, the current construction landscape provides a substantial opportunity for open shop workers should industry and government choose to realize it.

For one, the construction trades and government must start working together to provide and promote extensive safety and trade training -- to increase the technical capacity of the open shop workers. Partnering with community-based organizations will not only provide a trained workforce but a recruitment tool that is ready to provide a steady stream of good-paying jobs to a city-dwelling and diverse population in an industry that desperately needs it.

With a labor market in desperate need of skills training, it’s time for our partners in government to protect their constituents by fostering growth of the market, providing the right environment for open shop contractors to develop career ladders for their employees, and promoting open shop apprenticeship programs through the removal of roadblocks and red tape. This call to action doesn’t apply to laborers alone -- once these individuals complete their apprenticeships, basic labor tradesmen can be offered a path to train in the technical trades, for example as plumbers or electricians. By building on their pre-existing knowledge of construction and the construction process, skilled workers will have more opportunity to succeed in a wide array of trades.

Moreover, living wage and basic benefit programs must continue to be improved to ensure that workers are paid equitably, while  “second chance” programs should be expanded and made accessible to ensure that when an individual has repaid their debt to society, they’re able to get back on their feet in an industry that offers them a path to employment instead of incarceration.

We’ve all heard the term “pale, male, and stale,” and the construction industry has a long way to go before we can shake that label, which is why a focus on diversity will be critical to the industry going forward. Our workforce should be every bit as diverse as the communities we serve.

It’s past time that we as an industry seize this opportunity. The construction industry has historically been the economic sector to narrow wage disparity and give immigrant and forgotten Americans an opportunity to seize the American dream. Let’s work together and continue to give all our workers the ability to reach it.

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Ron Lattanzio is President of TradeOff Construction Services.

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The Aftermath of the Public Advocate Race


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Melissa Mark-Viverito & Jumaane Williams (photo: William Alatriste/City Council)


The public advocate special election has come and gone. The implications of the results will be felt for years to come. Yet there is a debate over whether the position of public advocate should even exist. But it is here and the last two to hold the position—Bill de Blasio and Letitia James—have moved on to higher office.

The Candidates
Jumaane Williams, the winner of the race with 33% of the vote in a very crowded field and now the third African-American to hold citywide office in New York City, will surely be mentioned as a mayoral candidate in the future. Williams, perhaps contrary to popular expectation, was dominant in a diverse set of communities in the city—from central Brooklyn to the Upper West Side, northern Bronx to the Lower East Side.

The following map, created by Steven Romalewski of CUNY Graduate Center’s Mapping Service, vividly captures the results of the citywide race, showing Williams’ geographically- and numerically-wide victory:

aftermath pub adv

The breadth and depth of his victory was surprising. Many, including me, assumed that Melissa Mark-Viverito, a Latina, would run a more formidable race. Conventional wisdom held that along with Williams (who ran for lieutenant governor last fall), she would enter the race with the highest name recognition, after serving as speaker of the City Council for four years and thus appearing often on newspaper pages and TV networks throughout the city. Instead, Mark-Viverito took a very distant third place, with only 11% of the overall vote.

Mark-Viverito’s electoral performance was so weak that she won her home Assembly district (the 68th district in East Harlem) by only 216 votes over Williams. By comparison, Williams defeated his next closest opponent by over 3,000 votes in his own Brooklyn Assembly district. Assemblymember Michael Blake won his home borough of the Bronx and in his home district defeated his closest opponent by over 1,000 votes.

This does not mean that Mark-Viverito has taken herself out of contention for future races. But she has much work to do to improve name recognition and to make a more compelling case for being elected to higher office.

The Votes
In my last column, I noted that 67% of the runoff election for this seat back in 2013 came from Manhattan and Brooklyn. I figured that in this shortened special election, these two boroughs would continue to play an outsized role. Manhattan and Brooklyn duly accounted for 60% of the overall voter turnout. And it was in these two boroughs that Williams vastly outperformed his competitors.

In that same column I pondered the potential role that outside groups and labor could play. I believe it was the endorsement of The New York Times, an entity I did not mention in that piece, that cemented an already strong campaign by Williams as outside groups and labor mostly remained on the sidelines.

The Black and Latino Vote
While it will be at least another month before we have the full data on who actually came out to vote, we have some hints about the Latino and black communities: that districts with over 55% of black voters comprised 22% of the overall vote; that districts with over 55% of Latino voters comprised about 10%; and that together black and Latino voters appear to have constituted almost a third of the overall vote.

As we explore the dynamics of the black and Latino vote in this special election, it is noteworthy that the depth of Williams’ victory extended to some key Latino districts, where it may have been expected that Mark-Viverito would dominate. Surely, having Ydanis Rodriguez and Rafael Espinal in the race did not help her cause to win the lion’s share of the Latino vote. But Williams’ performance is striking in places like Washington Heights, where he came within 16 votes of Mark-Viverito’s second place finish (Rodriguez won this, his home district).

In Bushwick, East New York, and parts of Williamsburg, where Latino voters still outnumber other groups, Williams handily beat Mark-Viverito and Espinal. These were all areas in which Mark-Viverito needed to pull out strong Latino numbers. But she failed to do so.

The Latino vote was particularly low overall. And that is troubling. During the previous municipal general elections, in 2017, Latinos made up roughly 18% of the overall vote (blacks comprised 30% of the vote). This past November, Latino turnout citywide increased by 3%. But in my estimation, in this special election Latinos barely reached the 10% mark. Though we will not have the full picture for a while, clearly plenty of work remains to be done to increase voter participation in Latino communities.

And as Latino leaders gather in Albany this weekend for the annual Somos legislative conference, I would hope that they brainstorm strategies to increase Latino voter participation.

All in all, and the public advocate special election notwithstanding, in years to come Latinos and black voters will continue to gain influence as crucial voting blocs in New York City. Given their potential voting power, the task is making sure they turn out to vote.

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Eli Valentin teaches political science at Monroe College and is a frequent guest political analyst on Univision NY. On Twitter @EliValentinNY.

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The Threat to Byford’s Fast Forward and Other Major Flaws in Cuomo-De Blasio MTA ‘Reform’ Plan


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(photo: governor's office)


My organization, Reinvent Albany, strongly supports congestion pricing and new revenue for the MTA, but we believe the MTA’s biggest organizational problem is the Governor’s endless political meddling and sidelining of the MTA’s and New York City Transit’s (NYCT) professional staff.

We hope the hastily contrived MTA restructuring recently presented by Governor Andrew Cuomo and Mayor Bill de Blasio in their “10-Point Plan to Transform and Fund the MTA” withers under public scrutiny and is rejected by the State Legislature and key county stakeholders in the MTA region. This is not real reform: it is a counter-productive distraction that continues the politicization of the MTA, and even codifies it.

Transit riders and those interested in a functioning system should stay focused on the 2016 pledge of Governor Cuomo and the Legislature to give the MTA 2015-2019 Capital Plan $8.3B, with $1B appropriated upfront. The governor and Legislature still owe $7.3B. Where is this money? To date, the MTA has received only $805 million from the state in cash it can actually spend on the current plan. We are especially concerned Governor Cuomo is about to renege on his $8.3B pledge because new revenue from congestion pricing will go to the next MTA capital plan – the 2020-2024 plan.

Reinvent Albany strongly supports congestion pricing for the Manhattan Central Business District and we thought Sam Schwartz’s Move New York plan was a masterpiece of public policy, but we have numerous concerns about the new 10-point plan from the governor and the mayor. Here are five big ones:

First, highly-respected NYCT President Andy Byford is stripped of power (Item #1). The governor’s proposed reorganization takes away a huge amount of fundamental management authority from New York City Transit President Andy Byford and shifts it to MTA Headquarters (HQ). We wonder what happens with Byford’s Fast Forward Plan if he can’t implement it? The governor proposes shifting engineering, contracting and construction management to MTA HQ. Why? NYCT just hired Pete Tomlin, an internationally respected expert, to lead NYCT in modernizing the subway signals, a cornerstone of Byford’s plan. What happens to this hire? MTA HQ has completely mismanaged the East Side Access project with up to $7B in cost overruns.

Second, the Cuomo plan creates new loopholes in the congestion pricing plan by creating vague exceptions for motorists (Item #2). Given the disastrous experience with state and New York City issued parking placards, the public should be concerned about the potential of these loopholes to be abused by politically powerful groups.

Third, what happens to the MTA if inflation is higher than 2%? (Item #3). A two-percent hard cap on MTA fare and toll hikes makes no sense. More reasonable would be to index to inflation, since inflation has historically regularly exceeded 2%.

Fourth, the proposed Regional Transit Committee duplicates and subtracts from the MTA Board’s authority and will create even more confusion (Item #7). If the Legislature wants representation on the MTA board or changes to the board, it should make them instead of creating a confusing mess that further reduces accountability. Moody’s – one of the MTA’s credit raters, which typically issues muted statements – even said that the this plan “will not necessarily reduce the management complexity that has complicated fare increases and capital program approval.” The MTA board should determine fares, tolls, and budgets, etc. If it does it poorly, reform it.

Fifth, the MTA, like other state authorities and agencies, should be run by professionals, not overseen by arbitrarily selected academics hand-picked by the governor (Item #8). There are many people in the world with more far more expertise in transit engineering and technology than the deans of Columbia and Cornell engineering schools – including within the MTA, like NYCT’s new hire, Pete Tomlin. Why should these informal advisors to the governor determine what kind of signals technology the MTA uses?

This is not the time to make major changes to redistribute power over the MTA’s governance structure, as there are too many stakeholders at risk. Changes to the governance of the MTA should be made independently of the budget after full and thorough discussion by MTA stakeholders and the public - something that we can truly call reform.

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Rachael Fauss is Senior Policy Analyst at Reinvent Albany. On Twitter @RachaelFauss & @ReinventAlbany.

 

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Amazon Was Never Going to Create 25,000 Jobs in Queens


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(photo: Kevin P. Coughlin/Office of Governor Andrew M. Cuomo)


Now that Governor Amazon Cuomo is grovelling for Amazon to come back to New York, it’s important to remember that the original sin of the “HQ2” deal is still true: Amazon was never going to bring 25,000 jobs to Long Island City.

That might surprise people, particularly since that number and its related economic activity have been the central arguments used to defend the deal. But to be clear, Amazon never actually promised to bring 25,000 jobs. Period. Go look for it.

Supporters point out that Amazon would get the full package of tax incentives, which are available to any company, only if it created the 25,000 jobs. That's absolutely true, but it proves the point. It shows that Amazon didn't need or really want the job incentives. Instead, it played off our failed economic development policies to get what it actually wanted.

What Amazon did care about, what it wanted more than anything, and what it would have gotten in the deal was a shiny new East River campus quickly, quietly, and cheaply.

First, Amazon didn't want to engage with the community or be a good neighbor. All of this would have taken a lot of time, but the real issue was that it would have involved making promises to the community that Amazon had no intention of ever making. The minimal promises it did make were entirely on its terms (and changed only slightly after pushback before Amazon finally walked).

Second, Amazon didn't want to pay the full cost of acquiring the choice land that it wanted to build its campus or go through the city’s land use review process (ULURP). That would have involved stringing together multiple lots at fair market value and convincing the city to sell public land. That would have meant more engagement with the public (and the City Council) and more commitments.

Third, Amazon knew it had to hire union labor for constructing and servicing the campus, but didn’t want to pay for it. More importantly, it didn’t want that to be a backdoor to unionizing its own larger workforce, especially in distribution centers. As much as some supporters have pointed to the construction and building-service jobs as evidence that Amazon was willing to work with unions, it was a political necessity to do so and had the added bonus of splitting the labor movement in New York. Amazon was never going to allow unionization in its Staten Island or other distribution centers as part of the deal.

By “promising” 25,000 jobs, Amazon got everything it wanted in the Memorandum of Understanding with the city and the state. It bypassed the City Council and real public review when the governor deemed “HQ2” a General Project Plan. It got its riverside campus when the mayor effectively turned over public land on a sweetheart lease (unquestionably saving Amazon hundreds of millions of dollars that weren’t and haven’t been included in the cost of incentives) while also killing a private development that included affordable housing and was going through the proper land-use channels. And Amazon got a flat out cash transfer of $325 million (with a possibility of up to $500 million) to cover costs of using union labor on construction.

Still, Amazon never had to deliver the jobs. To be sure, it was going to have a large workforce in Long Island City by consolidating several thousand employees already in New York and transferring more from Seattle. There is also no doubt that it would have hired some new employees locally. But there were no real promises of how many, at what salary, or from what communities. That just means we were going to give a competitive edge to Amazon by subsidizing an abstract total of jobs at a time when job growth is fine in the city.

As we've seen with Foxconn in Wisconsin, General Electric in Massachusetts, and just about every development project Governor Cuomo has produced (and his Economic Development Corporation has justified), the promised jobs and economic activity from these incentives rarely materialize, whether the companies get all of them or not. However, the public is always on the hook and companies almost never are.

Amazon exploits these policies all the time with its distribution centers (see Florida, Texas, California). They promise direct and indirect job creation that never happens. Amazon knew it wasn’t going to deliver 25,000 jobs and would never be held accountable for failing to. Amazon wanted its New York campus and simply took the flawed logic of our economic development policies to their extreme to get it.

Let’s not forget the bad faith Amazon showed when it originally announced the "contest" in September 2017. Remember, back then it wasn’t for 25,000 jobs -- it was for 50,000 jobs. Amazon and the media moved on quickly from that bait and switch, but we shouldn’t.

Amazon prides itself on being data-driven and strategic (yet: counterpoint), which means it’s safe to assume that the D.C. area and New York City had already been selected - making the whole idea of a “second headquarters” bogus from the beginning.

But why not announce a “contest” saying you’re going to create 50,000 jobs and have every city and state fall over themselves to compete for it? Amazon got a year’s worth of free advertising. It got reams of data from cities for future expansion and whatever else it may attempt. It forced New York and Virginia to offer billions for something it was already going to do and could easily afford.

Most importantly, Amazon got New York and Virgina to turn over land for campuses quickly and with no public review.

Back in December, I wrote about how I thought the Amazon deal was in trouble. Then, as now, it was clear that the deal was negotiated in bad faith from the beginning, that it would not actually do what the mayor, the governor, and Amazon said it would do, and it would not hold Amazon accountable for when it inevitably failed to live up to its vague end of the bargain. That is all still true.

Amazon is incapable of being a good partner. Everybody knows that now. Everybody knows how it treats its workers, its home city, and who it does business for. If it really needed a home for 25,000 jobs in New York City, it would have negotiated in good faith and worked through the concerns of the community it was moving into.

Instead, it wanted an insulated campus apart from the community paid for by the community, and bailed when it wasn’t served on a platter. Activists and a few steadfast local politicians accomplished a great public service by showing the real face of Amazon.  

More importantly, the “HQ2” ordeal shows the fatal flaws in our economic development policies that Amazon so cleverly exploited. Taxpayers spend $90 billion a year pitting cities against each other for unsubstantiated job numbers, which only works out for corporations and their shareholders.

This is done instead of solving the cities’ actual problems like the lack of affordable housing, overcrowded schools, a crumbling transportation system, and skyrocketing child- and health-care costs. It goes without saying that investing in this public infrastructure would also lead to new, bottom-up job creation -- many more than 25,000 -- for all kinds of New Yorkers, new residents, and new businesses.

As his recent grovelling has proven, Governor Amazon Cuomo has been guilty of this more than anyone. He values the optics of a ribbon-cutting ceremony on the East River with Jeff Bezos over the hard work that it takes to create actual jobs. Let’s hope Amazon’s bad faith trumps the governor’s and they stay gone.

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Peter Harrison is a member of NYC-DSA and CEO/Co-founder of homeBody, a public benefit startup. On Twitter @PeteHarrisonNYC.

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Big Upsides to Downstate Gaming: Union Jobs and Transit Revenue


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(photo: Governor's Office)


New York has a proud history of thinking big and building bold. As New York searches for routes to generate new revenue to fund critical priorities, and drive job growth through significant private investment projects, we have an unparalleled opportunity right in front of us.

Albany leaders should lift the moratorium on the expansion of casino development downstate and begin an open competition for the remaining three gaming licenses as approved by New York voters in 2013. No other opportunity is currently on the horizon to provide the infusion of jobs or revenue New York would experience with a robust, competitive, and transparent process to expand gaming downstate.

Surrounding states have taken advantage of New York’s moratorium on downstate gaming by moving quickly to expand gaming and produce new jobs and revenue for themselves.

Boston is putting the finishing touches on a $2 billion resort and gaming complex, with 4,000 permanent jobs and 5,700 construction jobs – good union jobs. Pennsylvania has seen $400 million in new revenue over the past year after enacting a broad gaming expansion. New Jersey is seeing $20 million a month in new revenue from sports betting alone, and Connecticut is considering gaming expansion in Bridgeport and on the New York border. And, ironically, New Yorkers who have limited gaming opportunities in their own state are often the ones funding tax revenues and job growth in neighboring states.

With due respect for our neighbors from Boston to Bridgeport, New York, with 60 million tourists a year to the City, is the single most attractive new market for gaming in the United States. Let’s show we can do it big and do it right: instead of a private company pitting cities against each other in a bidding war, let’s have private casino companies compete with each other for the right to valuable resort gaming franchises in New York.

A New York gaming development license is an extraordinarily valuable asset if structured correctly with a competitive process for three licenses that:

-Establishes a minimum license fee of $500 million per license -- totaling $1.5 billion in upfront revenue;

-Sets a minimum private investment of $2 billion per license -- bringing in $6 billion in private investment;

-Requires union labor on construction jobs and the right for unions to organize permanent operations jobs; and

-Dedicates new revenue to improve public transit service, fund public education, and other New York priorities.

If done right, releasing the remaining three licenses in a competitive bid process will generate tens of thousands of good union jobs and billions in revenue for the City and the State without any federal, state or local subsidies. And it would provide local and accessible economic opportunities for communities that are too often shut out.

The estimated $1.5 billion in up-front license fees from casinos could be dedicated immediately to fund public education or to help close the revenue gap needed for the MTA. If the State moves quickly, this revenue could be available in the next fiscal year. Additional, ongoing revenue from gaming and real estate taxes could be dedicated to fund crucial programmatic priorities – without any subsidies, and no additional taxes or fees on New Yorkers.

A significant private investment requirement of $2 billion for each gaming resort development (on top of license fees) would create a projected 16,800 permanent career union jobs, and an additional 15,000 union construction jobs. These are good jobs, benefiting a diverse union workforce with quality benefits including healthcare, training, and secure career opportunities.

Think about it: $6 billion in private development to fund critical needs. Built and operated by local union labor. No subsidies. Keeping New York dollars in New York. If you created the wishlist for future development in New York, you couldn’t do better. New York has the winning hand when it comes to making the most of the gaming licenses already approved by New York voters: Let’s play it.

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Gary LaBarbera is President of the Building and Construction Trades Council of Greater New York. John Samuelson is International President of the Transport Workers Union (TWU).

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New York Construction Workers Remain at Risk Without Legislative Action


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(photo: Kevin P. Coughlin/Governor's Office)


With this year’s legislative session in full-swing in Albany, special interest groups have resumed their attacks on laws designed to keep workers safe on construction sites. Construction and insurance trade groups, seeking to shed accountability and pad their pockets, have argued that labor protections like the Scaffold Safety Law are somehow undermining worker safety. However, a recent data analysis by the New York Committee for Occupational Safety & Health (NYCOSH) confirms that stronger safety requirements in New York City are helping to reduce on-the-job fatalities while worker deaths continue to rise in other, less-regulated parts of the state.

In 2017, the most recent data year available, the construction fatality rate across New York State was 52% higher than in New York City, according to our analysis of federal and city data. This significant difference in fatalities is not an outlier, but rather the continuation of an ongoing trend. Over the past five years, New York State’s construction workers have experienced a 39% increase in fatal injury rates compared to a 23% decrease in New York City. The stark gap in safety outcomes can be explained by the city’s more pronounced enforcement of safety regulations, which has helped to deter contractors from cutting corners and putting workers’ lives at risk.

Underfunding has constrained the federal Occupational Safety & Health Administration’s ability to conduct worksite inspections and enforce penalties for safety violations. In response, New York City officials have allocated more funding to the city’s Department of Buildings, boosting the agency’s budget from $107 million in 2015 to $183 million in 2019 and increasing its personnel from 1,156 employees in 2015 to 1,880 this year. Armed with larger staff and additional resources, the agency has expanded its ability to identify construction safety hazards and hold negligent contractors accountable.

The Manhattan District Attorney’s office has stepped up as well, prosecuting severe offenders through the Construction Fraud Task Force. By prosecuting bad actors for wage theft and dangerous labor violations, the DA’s office indicated that contractors are not above the law, especially when they are putting lives at risk. Beyond a more proactive approach to enforcement, the city has also encouraged employers to prioritize proper safety education by mandating that workers complete specific training and certification requirements.

At the state level, officials must uphold existing safety provisions and enact additional protections in order to reduce fatalities outside of New York City.

It’s imperative that lawmakers preserve the Scaffold Safety Law, which allows construction workers to hold negligent contractors responsible when serious injuries or fatalities do occur. The law simply calls for contractors to ensure that workers have access to proper safety equipment. If a failure to provide safety equipment leads to injury, workers are able to then hold the contractor responsible for the lost wages and medical bills that result. The Scaffold Safety Law is a crucial mechanism that deters contractors from cutting corners on safety equipment and promotes accountability.

In addition to maintaining the Scaffold Safety Law, policymakers should create a statewide vehicle to enforce labor protections and overcome the limitations of federal regulators. To that same end, the state Department of Labor should implement a registry of workplace fatalities to foster public transparency, as well as implement Carlos’ Law to increase the maximum fines that can be levied against negligent contractors.

The state would be wise to borrow a few lessons from New York City, by expanding the number of prosecutions for cases of severe employer misconduct and requiring construction workers to undergo training and certification.

The latest data offers a glaring reminder that construction remains a dangerous profession, particularly in the absence of meaningful regulations. At the same time, the decrease of fatality rates even when coupled with an ongoing construction boom in New York City indicates that stronger safety protections can save lives without stunting the industry’s growth.

For those who are committed to protecting the lives of New York’s working families, there is a clear path forward to improving construction safety centered on increasing worksite inspections, enforcing stronger penalties, and expanding workers’ access to safety equipment and resources.

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Charlene Obernauer is the Executive Director of the New York Committee for Occupational Safety & Health.

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Ending The School Aid Charade


gov cuomo edu

(photo: governor's office)


It is budget season in New York State and the annual game of determining the amount of state aid each of the 674 school districts will receive is in full swing. Every district and its legislators will fervently argue that more school aid is needed, that its schools are underfunded, and that its students will suffer serious harm if more money isn’t devoted to them as soon as possible. But in fact, the vast majority of New York’s schools are generously funded, while our results in terms of achievement are only mediocre. Instead of targeting additional aid to the few truly needy districts, all are given more.

As is the case in most states, New York public schools are primarily a local responsibility. Each school district runs its own schools, has its own contract with the teachers union, and relies on local property taxes to fund a large part of its costs. State school aid is meant to supplement the local tax contribution so that children in ‘low wealth’ districts are not denied the ‘sound basic education’ guaranteed by the State Constitution.

Each year a chorus of school advocates including the teachers union, school administrators, and state legislators argue for more state school aid. Whatever increase the Governor proposes is inevitably denounced as too little. The higher amount recommended by the State Education Department (SED) (controlled not by the Governor but by the Legislature via the State Board of Regents) is also decried as too low. Inevitably, some compromise amount is set in the state budget that is always a significant increase over the prior year.

The total amount of legislatively-approved school aid statewide rose 32% percent over the ten years between 2006 and 2017 and totaled more than $28 billion in fiscal year 2018, the largest expense in the state’s operating funds budget. Combined with local allocations, New York State school districts now spend a whopping $69 billion a year, an average of more than $25,000 per student, by far the highest amount in the country.

The game in its current form has been played since 2011, following the recession of 2008 when across-the-board school-aid cuts were imposed, when the Governor and the Legislature agreed to an annual ‘cap’ on the growth of school aid tied to growth in personal income and used a ‘foundation formula’ to determine the amount of aid each district would get, based on its number of poor students, English language learners, students with disabilities, regional cost differences, property values, and wealthy residents.

But the cap has never really been adhered to, and the results of the foundation formula are undermined through the addition of other kinds of aid (e.g. transportation, high tax aid) and foundation aid ‘hold harmless’ provisions ensuring that no district ever loses aid and indeed, that all get at least some increase each year no matter what they spend.

Why does this game go on? First, school aid is the primary vehicle for state legislators to ‘bring home the bacon’ and demonstrate effectiveness to their voters. The wealthiest school districts are in suburban areas where residents have shown the value they attach to top quality schools by paying very high property taxes. Even though these districts are already spending outsized amounts per pupil on their schools, they want more and their representatives need to get it for them. The Governor needs the support of these legislators for other parts of his agenda, so he is loath to disappoint them.

Second, public education advocates continue to make the argument that there are unmet school needs as revealed by the shortfall between aid amounts and what would have been provided under the foundation formula had it continued to be applied as approved in a lawsuit filed by a consortium known as the Campaign for Fiscal Equity (CFE).

The lawsuit ended in a settlement in 2007, and, while clearly articulating the right of all children in New York to free quality education, did not legally require implementation of its calculations of optimum aid. The Governor has called the CFE aid formula a ‘ghost of the past’ but the state teachers union and an alliance of other advocacy groups continue to insist that there is a shortfall of at least $4 billion in state school aid.

It is true that some school districts are underfunded and should receive more state aid to make up for their high number of poor students and their low property tax wealth. But there are less than 35 districts in this category and their unmet needs total less than $200 million. This shortfall could easily be filled by re-allocating a small part of the money that is going to school districts that do not need it; they are already spending far more than enough.

The 62 wealthiest districts in New York are receiving almost $5,000 a year in state school aid and are spending an average of $30,500 per student per year. The 68 poorest districts are getting much more aid – an average of $15,700 per student – but because they don’t have sufficient local resources, they can spend only $22,000 per student per year. There is no educational reason to give the wealthier districts any aid, and certainly no more than they are getting.

Surely, everyone involved in setting school aid amounts knows this. But the CFE advocates don’t want to alienate a large of portion of their support from the wealthy districts by arguing only for targeted aid increases and the legislative representatives of the well-funded school districts are certainly not going to kill the golden goose. So we continue with a charade of hand-wringing about the need for more school funding state-wide.

This year Governor Cuomo has proposed almost $1 billion in additional aid, SED wants more than $2 billion more, and the CFE groups are still demanding $4 billion. The reality is there is no justification for more state school aid, it just needs to be re-allocated and targeted to the specific districts that are actually needy. But more school aid there surely will be. This is especially infuriating when the Governor is proposing to reduce spending on Medicaid to address an expected $2.3 billion revenue shortfall in the next fiscal year.

In his second State of the State address, in 2012, Governor Cuomo complained that all the adults in the public school system have lobbyists pressing for more spending and that he would now be the students’ lobbyist. But over time, he has made compromises with the political realities; while his school aid proposals are accompanied by rhetorical acknowledgement of the need for better targeting, the chorus of calls for everyone everywhere in the state to receive more school funding continues. It is well past time for this charade to end.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

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Prevailing Wage Extension Would Kill Jobs and Limit Housing for New Yorkers


gov cuomo moynihan

(photo: governor's office)


If there’s one thing that New Yorkers can agree on, it’s that we should always strive to create new jobs, not take them away. Amazon’s recent decision to withdraw its planned “HQ2” from Long Island City is an example of us failing on this front. However, public officials still have an opportunity to redeem themselves by protecting local workers from a proposed prevailing wage expansion.

Discussions are currently underway in Albany to extend prevailing wage requirements to private construction projects and could cost New York City thousands of jobs. Elected officials should heed the warnings of community leaders and push back against powerful unions that are advancing their own agenda at the expense of New York’s working class.

The dangers of expanding the prevailing wage to private work projects are numerous. First, advancing this initiative neglects to consider the negative consequences it will have on the city’s working families. In the past, Governor Cuomo has said, “Construction with public subsidies should be subject to the prevailing wage so they’re built right, they’re built fairly, they’re built union.” However, there’s no guarantee that this requirement will result in projects being built right and fairly—instead, the only thing it assures is that non-union workers are forced out of the hiring pool as developers are forced to hire union.  

As a result, any efforts to extend the prevailing wage to private projects directly impacts workers of color, who make up the majority of the non-union workforce. Per industry data, roughly three quarters of non-union workers are either black or Latino and live in one of the city’s five boroughs. This is in part due to the fact that unions have historically imposed barriers to entry for people of color, which persist to this day. Just two months ago, for example, six African-American engineers at the LaGuardia Airport renovation project filed a lawsuit against the Operating Engineers Local 15 chapter for alleged discriminatory hiring practices and treatment by union supervisors.

Beyond the detrimental effects it would have on minority workers, instituting a prevailing wage requirement at private projects would actually diverge from the dominant trend in the city’s construction industry. According to our analysis of building permit numbers provided by the city, approximately 80 percent of private construction work is now being done by non-union workers.  

Additionally, these workers have secured benefits on par with those of union members. On average, they earn $20 per hour, competitive health care packages, and 401(k) packages that allow them to secure their futures. Therefore, contrary to some misconceptions, opposition to prevailing wage does not equate disregard for workers’ rights.

Expanding the prevailing wage would also have a harmful effect on housing opportunities for many of these non-union workers. New York has an affordable housing shortage, and a prevailing wage will only make this housing crisis worse. The Independent Budget Office found that a prevailing wage requirement would increase construction costs by 23 percent. Additionally, such an increase would significantly alter Mayor de Blasio’s plan to create 80,000 desperately needed new affordable housing units, or simply cost an additional $4.2 billion.   

Ultimately, those same hard-working New Yorkers who are being left out of prevailing wage discussions are the ones who stand to be affected most by it. Our elected leaders should stand up to powerful union interests and their agenda by securing the economic well-being of the construction industry and the workers that build it up.

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Clark Peña is Director of Advocacy at the Construction Workforce Project. On Twitter @CWPNYC.

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Addressing the Crisis of Family Separation Here in New York


reunion hug prison visit


It is time to address the crisis of family separation. This time, it’s not about the humanitarian emergency on our nation’s southern border, but our own homegrown crisis that affects New York’s approximately 80,000 children with a parent in prison. Most of these children deeply miss and want to visit their mothers or fathers, yet distance is a barrier, and many of New York’s 54 prisons are not accessible by public transportation.

Time and again, constituents from across the state have asked us for help. Grandmothers like Mrs. Coleman who was unable to take her grandchildren in Brooklyn to see their mother when she was incarcerated near the Canadian border. She once drove through the night so as not to miss school and work, her grandchildren asleep in the back, and scarily, almost fell asleep at the wheel. Children like Jeremiah and Jonathan, who used to see their father monthly when he was an hour away by MetroNorth, but now have no affordable way to travel 10 hours to see him. And Brianna and Isaiah, from Buffalo, who have seen their mother only once since she was moved to Taconic Correctional Facility, almost 400 miles away.

There are four bills before the New York Senate and Assembly that would address these issues: the Visiting Bus, Proximity, Restoring 7 Day Visiting, and Codifying Visiting bills will improve children’s access to their parents, strengthen family connections, and promote the correctional and public safety goals of rehabilitation and successful reentry. Many prison officials—including former Corrections Commissioner Brian Fischer—report that visiting improves the prison environment, promotes program participation and rehabilitation, and increases the likelihood of successful reentry.

The Visiting Bus bill restores free transportation for families visiting a New York State Prison. In 1973, in the aftermath of the Attica Uprising, New York State undertook a series of reforms that included these free visiting buses. The buses operated for 38 years until their funding was eliminated from the state budget in 2011.

Visiting buses are more cost-effective and less onerous on families if people need not travel great distances to visit a loved one. The Proximity bill will place parents in the prison as close to their children as possible if the parent, the child, and the child’s caregiver also agree, and only after the state corrections department’s existing assignment criteria of security, health, and programming needs are satisfied.  

When prison visit rooms are open every day, families have more flexibility to visit as well as to visit two days in a row, making the most of their time and resources they spent to travel to the facility. Only maximum security prisons currently offer visiting every day. The Restore 7 Day Visits bill would remedy this. New York State has long been a national leader in offering in-person visiting. The Codifying Visiting bill ensures in-person, contact visits are a right throughout New York that cannot be replaced by video visiting.

Taken together, these bills strengthen a lifeline between parents and children who often grapple with their parent’s incarceration in isolation, fearing someone will find out and treat them differently as a result. Visiting lessens this isolation and stigma, maintains the parent-child relationship, and allows children to see others in the visiting room and realize they are not alone.

This is not simply a downstate issue. Today, 60% of incarcerated women and 50% of incarcerated men in state prisons come from areas outside of New York City. It affects all of us, and it is up to all of us to ensure that no family will have to choose between bringing a child to see his or her parent or putting groceries on the table.

Just as Mrs. Coleman and her grandchildren have asked us for help, we urge our colleagues in the Legislature and Governor’s office to pass these bills, fund the visiting buses, and strengthen this lifeline for thousands of children and families.

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Assemblymembers Carmen De La Rosa and David Weprin are a member and the chair, respectively, of the New York Assembly Committee on Correction. On Twitter @CnDelarosa & @DavidWeprin.

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