State Contractor’s Pay Halted Amid Budget Delays

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Officials say they'll stop paying contractors on state construction projects, for at least a week, starting tomorrow. This follows yesterday’s announcement by Gov. David Paterson that the state will delay $2.1 billion in education aid because the state doesn’t have the money.

The temporary state budget approved Monday didn't allocate any money for road or other building projects, unless they are of an emergency nature. That means bills won't get paid until a new budget is passed or other money is freed up for capital projects.

Paterson says it’s up to contractors whether to continue to work, but he told reporters that he hopes they do.

“While it may be more expensive to lay people off than to just complete the projects and await the payments, we don't think that the payments would take that long if we can get our budget passed quickly,” Paterson says.

The head of the General Contractors Association, Denise Richardson, says her organization is unhappy to be essentially loaning the state money, but she says her members feel they could be liable if they walked off the job, and they'll continue working, at least for the short term.

“Right now they literally are becoming the bank of New York as they finance these projects because they have no idea when they will get paid,” Richards says.

She says contractors are busy calculating how much longer they can continue working without pay.

Hundreds of projects across the state are affected, including the Department of Transportation’s reconstruction of the Interstate 95 bridge over the Harlem River.

Contractors working on federal stimulus jobs and for the MTA and Port Authority will continue to get paid as that work falls outside the state budgeting process.