WXXI: Not For Profits Want IDA Law Renewed (2008-05-13)

Not for profit groups say they are caught in the middle of a stalemate in the legislature and now can't borrow needed capital for things like expanding hospitals, schools and nursing homes.

Around 20 years ago, changes in the federal tax law allowed not for profit groups that run schools, hospitals, and centers for the disabled to borrow money at low interest rates and more favorable terms from IDA's, or Industrial Development Agencies. The groups say the loans have saved taxpayers money, because they have not had to pay higher interest rates and fees to banks when they undertake construction projects. But now, those capital funds are unavailable to the not for profits, because part of the law authorizing the IDA's has expired. The portion dealing with the low interest loans sunseted on January 31st, and has not been renewed by the governor and legislature.

Margery Ames, with the Inter Agency Council of Mental Retardation and Developmental Disabilities Agencies, is in charge of 120 agencies in the New York City area that serve 100,000 developmentally disabled people. She says the lack of access to capital is becoming a crisis.

"We're really asking the legislature to put an end to this nightmare," Ames said.

Jeff Bray, of the New York State Economic Development Council, says the IDA loans have been used to expand a hospital and build a youth center in Gloversville, which is in an economically troubled upstate region.

Other projects now in limbo include nursing homes in the Adirondacks, and charter schools in Buffalo.

The renewal of the law has been held up over the issue of prevailing wages. Unions would like to require that recipients of the loans pay the prevailing union wage in the region to construction workers employed on the project. The not for profits fear that the prevailing wage could apply to everyone involved, not just the carpenters and plumbers, and they say they simply cannot afford to raise everyone's salary.

James Parrott, with the union backed think- tank Fiscal Policy Institute, says paying prevailing wage to workers really just means paying an amount that people can live on, and he says it won't bankrupt the not for profits.

"We're not talking about extraordinarily high wage standards here," Parrott said. "We're talking about a living wage level."

Assembly Speaker Sheldon Silver says he believes that a "compromise" can be negotiated on the prevailing wage issue and that the IDA loans can be renewed before the legislative session ends. The non-profits say they hope the Senate will also work to resolve the issue in the coming weeks.