A coalition of more than 50 advocacy groups, including the Rochester Business Alliance, has issued a joint letter to Gov. Andrew Cuomo and his top budget staff, urging reform of New York's Scaffold Law in the 2014-15 executive budget. The coalition represents small and large businesses, developers, insurers, builders, contractors, municipalities and taxpayers.
The Scaffold Law, which dates to 1885, holds contractors and property owners fully liable in lawsuits for construction injuries involving falls, regardless of any fault on the part of a worker. New York is the only state with this law still on the books. Coalition members said Scaffold Law damage awards, which represented 16 of the top 30 settlements in New York in 2012, are responsible for escalating insurance and building costs across the state.
The absolute liability standard imposed by the Scaffold Law drives up insurance costs for every private and taxpayer-funded construction project. Pure premium costs for construction projects in New York are the highest in the nation by more than 300 percent. To put it in a real dollar perspective, the impact of the Scaffold Law on construction costs for the new Tappan Zee Bridge is estimated to be between $100 million and $400 million. Closer to home, the Scaffold Law adds an average of $10,000 to the cost of a new house.
Simply put, this antiquated law threatens the viability of many small businesses and imposes hundreds of millions of dollars in costs on taxpayers. It's time for Gov. Cuomo to include Scaffold Law reform in his executive budget and for the Legislature to pass it in the coming session.
Mike Durant, state director for the National Federation of Independent Business, said, "The Scaffold Law is the standard-bearer of New York's dubious anti-business reputation."
Many insurance carriers have exited New York's general liability market, reducing competition and costing jobs in both the construction and insurance industries. Higher insurance costs also put New York firms at a competitive disadvantage against out-of-state competition. After repeal of a similar law in Illinois in 1995, insurance loss costs fell, worker injuries decreased and construction employment increased.
Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, said, "Reforming the law is plain common sense. Evidence shows us this will create jobs, stimulate the economy and reduce costs to taxpayers."
The letter states that reforming the Scaffold Law would help advance many of Cuomo's goals, citing Budget Director Robert Megna's recent letter to agency commissioners, which said: "The 2014-15 capital budget will focus on targeted investments that strengthen the state's infrastructure and create jobs while maintaining a level of affordability."
The coalition believes that reforming the Scaffold Law will reduce costs for taxpayer-funded capital projects, boost job creation, stimulate the economy and generate tax revenue. The joint letter stressed that reform would not prevent an injured worker from bringing a lawsuit or adversely affect workplace safety. Citing estimates by the Pacific Research Institute, the coalition emphasized that reforming the Scaffold Law could create approximately 86,000 jobs and increase tax revenue by $1.04 billion.
As state Comptroller Tom DiNapoli recently reported, fully one-quarter of New York counties and 11 percent of cities are struggling financially, and both numbers have risen over the past year. These conditions threaten the provision of vital services and increase burdens on local and state taxpayers. While there is no magic bullet, reforming the Scaffold Law would significantly alleviate fiscal stress by saving taxpayer dollars, creating jobs and increasing revenue for the state and localities.
Peter Baynes, executive director of the New York State Conference of Mayors, said, "The last thing New York should be doing right now is artificially inflating the cost of public and private-sector activity, particularly when the law serves no valid public purpose."
Legislation to reform the Scaffold Law currently enjoys bipartisan support in both houses of the Legislature, and supporters are hopeful that inclusion in the executive budget will be the next step toward achieving this shared goal.
Mike Elmendorf, president and CEO of the Associated General Contractors of New York State, said, "Reforming New York's outdated and costly Scaffold Law is not only long overdue but necessary to rebuild New York's infrastructure and economy."
New York can no longer afford to remain the only state in the nation with an absolute liability standard for construction injuries from falls. Repealing or reforming this outdated statute would reduce costs to taxpayers, create jobs and generate tax revenue with no adverse impact on worker safety.
Therefore, the coalition, including the Rochester Business Alliance, urges the governor to include Scaffold Law reform in his 2014-15 budget.
You can also get involved. This past February, the RBA joined more than 150 attendees from business, education and government at a Scaffold Law reform day in Albany. This coming February, we plan to attend another lobby day. To learn more about this event and how to make your voice heard, visit www.scaffoldlaw.org.
Sandra Parker is president and CEO of the Rochester Business Alliance Inc. Contact her at SandyP@RBAlliance.com.
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