Editorial: Governor’s veto pen will save taxpayers money

Thank goodness for the veto pen.

Gov. Brian Sandoval used that veto pen this past week to block an attempt by Democratic lawmakers to rollback a modest cost-saving measure passed by the Republican-controlled 2015 Legislature.

Assembly Bill 154 would have raised the cost of construction of university and public school buildings by reimposing the so-called prevailing wage on more projects.

Brian Sandoval (R-J pix)

Prevailing wage laws require that workers on public construction jobs be paid no less than the “prevailing” wage in the area where the work is being done. The wage rate is set by the state Labor Commissioner based on a survey of contractors. The survey is so time consuming that in reality only union shops bother to comply, meaning the prevailing wage is the highest union wage.

AB154 would have also required that contractors doing any university or public school work exceeding $100,000 pay prevailing wage, down from the current $250,000. It also requires the full prevailing wage instead of the current 90 percent for school projects. Both the lower threshold and the lower percentage were approved in 2015.

At one point in the 2015 legislative session, a bill was passed to remove the prevailing wage requirement for schools entirely, but in an 11th-hour deal to get Democrats to support Sandoval’s tax hike the $250,000 threshold and the 90 percent of prevailing wage were approved.

Sandoval pointed out in his veto message that the measure would add costs for school construction and reduce the value to the recently voter approved sales tax increase in Washoe County to build new public schools.

“Stakeholders and lawmakers compromised in 2015 to propose moderate, but necessary reforms that I supported,” he wrote in a veto message, according to news accounts. “There is no superseding change today that justifies the rollback of this compromise.”

During testimony about the bill, Warren Hardy of the Associated Builders and Contractors pointed out that a contract for construction of a middle school in Clark County received a low bid of $2.7 million during that brief period a couple of years ago when it looked like the prevailing wage requirement would be dropped for schools, but when the prevailing wage was reinstated the low bid jumped to $3.6 million.

The Nevada Policy Research Institute in its “Solutions 2015” handbook estimated the law required the state, cities, counties, school districts and other government entities to pay 45 percent higher wages for public construction projects than necessary — a cost to taxpayers of $1 billion a year.

The better outcome, of course, would have been to repeal all requirements for prevailing wages on public construction projects, but with Democrats in the majority that is not likely to happen. AB154 passed both the Senate and the Assembly on a straight-party-line vote, all Democrats in favor and all Republicans opposed.

Sandoval did the right thing in vetoing this bill.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

 

Newspaper Column: Prevailing wage law change will cost taxpayers

A fool and his money are soon parted.

In Nevada those fools are the taxpayers who keep electing Democrat majorities to send to Carson City to pick their pockets.

Assembly Bill 154, sponsored by a raft of Democrats, would roll back the minor headway made just two years ago to cut the cost of public works. It would raise the cost of construction of university and public school buildings by reimposing the so-called prevailing wage on more projects.

Prevailing wage laws require that workers on public construction jobs to be paid no less than the “prevailing” wage in the area where the work is being done. The wage rate is set by the state Labor Commissioner based on a survey of contractors. The survey is so time consuming that in reality only union shops bother to comply, meaning the prevailing wage is the highest union wage.

AB154 would require that contractors doing any university or public school work exceeding $100,000 pay prevailing wage, down from the current $250,00. It also requires the full prevailing wage instead of the current 90 percent.

Las Vegas Democratic Assemblyman Chris Brooks, chief sponsor of the bill, testified before the Assembly Government Affairs Committee recently and actually claimed the bill would save money.

“Research shows that prevailing wage laws lead to more workforce training, a more educated and experienced workforce, safer construction and government savings because workers depend less on social programs,” Brooks said. “Prevailing wage laws are better for the economy because they support the middle-class incomes that boost consumer spending. Eliminating the prevailing wage does not save money and can actually cost more money.”

Warren Hardy of the Associated Builders and Contractors contested this allegation of savings by pointing out that a contract for construction of a middle school in Clark County received a low bid of $2.7 million during a brief period a couple of years ago when the prevailing wage was dropped for schools, but when the prevailing wage was reinstated the low bid jumped to $3.6 million.

In 2000, A.D. Hopkins wrote a series of articles for the Las Vegas Review-Journal, outlining the profligacy of the prevailing wage law. One article stated: “Nevada’s prevailing wage law costs taxpayers about $2.3 million extra on every new public high school being built in Clark County, according to a database analysis by the Review-Journal.”

In 2012, Geoffrey Lawrence penned a column for the Nevada Policy Research Institute website on Nevada’s expensive prevailing wage law. He noted how a plumber in Mesquite might expect to be paid less than $20 an hour for most jobs, but, if it is a public works project by a state or local government entity, that same plumber would be paid, by law, more than $70 an hour.

Lawrence’s piece pointed out that an NPRI analysis estimated that prevailing wage requirements cost Nevada taxpayers nearly $1 billion extra over 2009 and 2010. The state’s biennial general fund budget is less than $7 billion. “That’s why prevailing wage reform needs to be at the top of the agenda for the Nevada Legislature in 2013,” Lawrence wrote.

NPRI in its “Solutions 2015” handbook estimated the law required the state, cities, counties, school districts and other government entities to pay 45 percent higher wages than necessary — a cost to taxpayers of $1 billion a year.

For a little historical perspective, the prevailing wage law is a vestige of the Jim Crow era and is modeled on the Davis-Bacon Act of 1931 that was expressly intended to keep cheaper Southern black laborers from getting jobs on public works projects.

The discriminatory nature of prevailing wages persists to this day.

Hardy of the Associated Builders and Contractors said during testimony on the bill that his organization does not have a problem with federal prevailing wage law but does object to the way the wage is calculated in Nevada, which results in unions setting the prevailing wage.

“The overwhelming majority of small businesses, the overwhelming majority of minority-owned businesses, the overwhelming majority of women-owned businesses are non-union,” Hardy said. “These folks are not union contractors. So what you’re saying is, we need to build laws, which is what the prevailing law does in this state quite frankly, to incent the hiring of union contractors. That disenfranchises small businesses, women- and minority-owned businesses because they are overwhelmingly nonunion contractors.”

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Another bill in Carson City would cost Nevada taxpayers dearly

A fool and his money are soon parted.

In Nevada those fools are the taxpayers who keep electing Democrat majorities to send to Carson City to pick their pockets.

Assembly Bill 154, sponsored by a raft of Democrats, would roll back the minor headway made just two years ago to cut the cost of public works. It would raise the cost of construction on university and public school campuses be reimposing the so-called prevailing wage on more projects.

Prevailing wage laws require that workers on public construction jobs be paid no less than the “prevailing” wage in the area where the work is being done. The wage rate is set by the state labor commissioner based on a survey of contractors. The survey is so time consuming that in reality only union shops bother to comply, meaning the prevailing wage is the highest union wage.

AB154 would require that contractors doing any university or public school work exceeding $100,000 pay prevailing wage, down from the current $250,00. It also requires the full prevailing wage instead of the current 90 percent.

In 2000, A.D. Hopkins wrote a series of articles for the Las Vegas Review-Journal, long since disappeared from the paper’s website, outlining the profligacy of the prevailing wage law. The lede on one of the earlier stories in the series read: “Nevada’s prevailing wage law costs taxpayers about $2.3 million extra on every new public high school being built in Clark County, according to a database analysis by the Review-Journal.”

In 2012, Geoffrey Lawrence penned an outstanding column for the Nevada Policy Research Institute website on Nevada’s expensive prevailing wage law.

He noted how a plumber in Mesquite might expect to be paid less than $20 an hour for most jobs, but, if it is a public works project by a state or local government entity, that same plumber would be paid, by law, more than $70 an hour.

Lawrence’s piece pointed out that an NPRI analysis estimated that prevailing wage requirements cost Nevada taxpayers nearly $1 billion extra over 2009 and 2010. The state’s biennial general fund budget is less than $7 billion. “That’s why prevailing wage reform needs to be at the top of the agenda for the Nevada Legislature in 2013,” Lawrence wrote.

NPRI in its “Solutions 2015” handbook estimated the law required the state, cities, counties, school districts and other government entities to pay 45 percent higher wages than necessary — still at a cost to taxpayers of $1 billion a year.

For a little historical perspective, the prevailing wage law is a vestige of the Jim Crow era and is modeled on the Davis-Bacon Act of 1931 that was expressly intended to keep cheaper Southern black laborers from getting jobs on public works projects.

The discriminatory nature of prevailing wages persists to this day.

Warren Hardy of Associated Builders and Contractors was quoted by the Las Vegas newspaper as testifying, “The overwhelming majority of small, minority or women-owned businesses are nonunion,” and, because of prevailing wages, many are unable to compete for public projects.