New Yorkers are rightfully concerned about the cost of living. But New York’s elected leaders are missing a real opportunity to address the issue.
Everything is too expensive in New York, especially taxes and government mandates which stealthily raise the cost of living here.
Gov. Hochul mentions the “affordability crisis” and proposes a $500 “inflation rebate,” a bit of political moonshine which does nothing to lower costs.
One area where New York officials could immediately act would be to repeal an antiquated law — dating from 1885 — which arbitrarily raises the cost of insurance on construction projects. This law, known euphemistically as the “scaffold law”, increases the cost of construction by 5-7% in New York State.
This impact is due to state law and court decisions which impose a legal standard known as absolute liability when dealing with injuries which occur on construction sites. Every other state in the Union and the District of Columbia judge workplace injuries according to a comparative negligence standard.
Think about it. Every other jurisdiction in the United States evaluates construction accidents one way and New York does it another way. What could go wrong? Plenty.
Absolute liability in New York means that a contractor and the building owner are automatically liable regardless of whether the worker contributed to or was at fault in the accident. Even if the worker was drunk or on drugs when injured, the contractor or building owner remains legally liable. Comparative negligence on the other hand evaluates liability based on whether the injured worker was all or partially responsible for the accident.
The absolute liability standard means that insurance costs for building construction are significantly higher in New York than elsewhere. These disparities inflate the cost to build everything in New York State.
These increased costs impact virtually every type of construction in the state including transportation projects like roads, bridges and subways. Similarly, apartments, commercial and industrial building construction are all made more costly. One affordable housing developer told me that insurance costs in New York were three times the cost of comparable projects in New Jersey.
This New York law also impacts federal taxpayers as the state and localities receive massive amounts of federal aid in the form of grants, tax credits and loans for construction.
The law was originally justified as helping to ensure worker safety on the job, prior to the establishment of federal and state labor protections. But the facts indicate that today construction workers in our state are no safer because of this law.
Worse, the law is now being used by unscrupulous lawyers and doctors to stage phony accidents. Recently ABC News ran a major story exposing fraudulent construction worker injuries, often using gullible migrant workers to participate in these get rich quick schemes. You might think that rampant fraud would catch the attention of the governor and legislators in Albany, but you would be wrong. Only a few raise their voices against this system.
Failure to fix this problem rests with the governor and the state Legislature in Albany. Under the sway of a small segment of the trial lawyers bar which handles these cases, they ignore the problem and miss a real opportunity to address an actual “affordability crisis.”
In Washington, the Trump administration and Congress should act to preempt New York’s law on all federally funded construction projects in the state. A bill being drafted by Rep. Nick Langworthy would accomplish this reform. A similar federal preemption of New York law was adopted in 2005 relating to auto leasing.
Over the next 10 years, federal taxpayers will contribute an estimated $200 billion for housing, transportation, high tech and other similar projects throughout New York State. Approximately $10-$12 billion of federal taxpayer funds will be wasted paying for insurance coverage in New York because of this crazy law.
A small minority of trial lawyers continue to win this battle in Albany. It is a classic case of an intense special interest prevailing over common sense and the broader public good.
Albany needs to fix this legal monstrosity and conform liability for construction injuries to the comparable negligence standard which prevails everywhere else in the United States. If Hochul and the Legislature fail to act, Congress and the Trump administration should act to override this law on federally funded projects.
Faso represented Kinderhook, N.Y. in Congress and the state Legislature.