NYSSBA ISSUE BRIEF
The Wicks Law currently requires New York school districts to hire four separate contractors for school construction – a general contractor plus contractors for electrical, HVAC (Heating, Ventilation and Cooling) and plumbing. By making each of these contractors a prime contractor, each is free to interrupt a school construction project by working on other projects. Each time they do so, all of the other contractors must sit idle, leading to enormously expensive cost overruns and unsafe school conditions. While originally intended to assure prompt payment by general contractors to their subcontractors, this requirement has proven to be one of the most onerous and costly mandates facing schools and local governments. Every state except New York has found a much more efficient and effective way of providing protections for subcontractors without burdening taxpayers with the additional costs resulting from this outdated and misdirected measure.
The high cost implications of Wicks are long-studied and well-documented. Previous studies that have shown that the Wicks Law results in significantly higher construction costs of as much as 30 percent on public projects. They include:
- Fiscal Implications of the Wicks Law Mandate, conducted by the New York State Division of Budget in May 1987 – which found that the Wicks Law increased construction costs by 24 percent to 30 percent.
- Impacts of Wicks Law – Final Report, conducted by the New York State School Boards Association in March 1991 – estimates that the Wicks Law increased project costs anywhere from 20 percent to 30 percent.
- Price Waterhouse Coopers 1999 analysis of Wicks in New York City – estimated savings of $192 million because school districts in New York City are exempt from the Wicks Law
NYSSBA members join a chorus in calling for the repeal of the Wicks Law. Both the Lundine Local Government Commission and the Suozzi Tax Relief Commission called for the repeal of Wicks. The New York Bar Association has called for total overhaul of the state’s public construction laws, specifically pointing to the outdated Wicks Law. The American Council of Engineering Companies of New York has called for the reform of Wicks. Unshackle Upstate, a coalition of nearly 60 organizations representing over 32,000 employers has called for reform to the Wicks Law. Yet New York remains the only State to impose these requirements on public projects.
Exemptions from the Wicks Law for school districts are not unusual. New York City has long been exempt, as has Buffalo and Niagara Falls. The Syracuse school construction authority is also exempted from Wicks, provided it utilizes, like Buffalo, a Project Labor Agreement (PLA). Other individual exemptions have been granted; for instance to Ithaca and to Rensselaer. Property taxpayers should not be discriminated against depending on where they live. Repeal of the Wicks Law would ensure all state taxpayers are treated equitably.
According to SED, there were 7,941 capital projects outside of New York City from 2001-06 worth approximately $10.8 billion. While some estimates of the Wicks “premium” are as high as 30 percent, a premium of even 10 percent would mean that over $1 billion in taxpayer funds was wasted. The State University Construction Fund (SUCF) is also free from the Wicks mandate as is the Dormitory Authority. SUCF has built over $2 billion worth of SUNY campus projects and has demonstrated that ‘bid shopping’ has not been a problem on single award contracts.
In the face of objective evidence, NYSSBA recommends the repeal of the Wicks Law. Each dollar lost to Wicks, is a dollar unavailable for educational programs, student achievement and taxpayer savings.