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.

Newspaper column: Proposed environmental bills would kill jobs

Workers frack a well in North Dakota. (Reuters photo via R-J)

Workers frack a well in North Dakota. (Reuters photo via R-J)

With delusions of saving the planet from catastrophic warming, a Las Vegas assemblyman is offering up a futile gesture in the form of a bill to ban fracking in Nevada.

According to media accounts Democratic Assemblyman Justin Watkins has stated fracking causes earthquakes, contaminates water, pollutes the air and basically creates an eyesore.

His Assembly Bill 159 would amend state law by adding: “A person shall not engage in hydraulic fracturing in this State. As used in this section, ‘hydraulic fracturing’ means the process of pumping fluid into or under the surface of the ground to create fractures in the rock to facilitate the production or recovery of oil or gas.”

First, any earthquakes associated with fracking were not caused by fracking but by pumping fracking waste into injection wells, because the environmentalists object to leaving what is mostly water and sand on the surface.

As for contaminating groundwater even Obama’s EPA had to stretch beyond credulity to conclude there is a “chance” of pollution. In its report on the topic the EPA scientists said fracking “can impact drinking water resources under some circumstances,” but “the scientific evidence is insufficient to support estimates of the frequency of contamination.” They said the instances of contamination were small in comparison to the vast number of fracked wells across the nation. Almost nonexistent is more accurate.

Oil and natural gas wells, with or without fracking, produce oil and gas, the burning of which releases some carbon. We grant that, but fracking has actually cut the nation’s carbon output since natural gas burns cleaner than coal when used in power generation.

As for being an eyesore, modern fracking and drilling techniques eliminate the need to drill hundreds of wells in close proximity to hit small pockets of oil, such as can be seen in Bakersfield, Calif. Instead these pockets are tapped by drilling one well and then drilling out horizontally.

It would appear Watkins is under the misconception that fracking is some sort of recent untested endeavor.

The first fracking patent was issued in 1866. It used nitroglycerin explosions to fracture formations. The first commercial application of hydraulic fracking took place in 1949. In many oil and gas fields a vast majority of wells are fracked at one time or another, either initially or later to prolong the productive life of the well.

In the 1980s Texas oilman George Mitchell combined the techniques of fracking and horizontal drilling to develop the Barnett Shale formation in North Texas. This has resulted in a boom in natural gas production and a decline in oil prices, creating countless jobs and growing the economy.

In 2014 the Nevada Division of Minerals Administrator Rich Perry released Nevada’s 20-page revised rules on fracking that require groundwater testing before and after drilling, pressure testing of equipment, notifications to landowners before fracking begins and abiding by strict engineering standards. More than adequate precautions.

Though there have been a few fracked wells in the Elko vicinity in recent years, there reportedly are none ongoing at this time in Nevada.

But there is potential with the Chainman Shale formation, which lies largely in an 80- to 100-mile-plus radius around Duckwater — including almost all of White Pine County, major portions of Nye, Lincoln, Elko, Eureka and Lander counties, as well as parts of a couple of counties in Utah.

The formation is believed to be rich in oil, though most lies 2 to 5 miles underground, making drilling expensive when oil prices are fairly low — largely due to ample supplies created by fracking.

A fracking ban just might kill a number of potential jobs in Nevada and deprive the state economy and the state tax coffers of revenue. All for no discernible reason.

As if the fracking ban were not enough, another Las Vegas Assemblyman — Chris Brooks, who has worked in the solar panel installation business for years — has introduced legislation that would greatly increase the percentage of electric power sold in the state that must be generated by renewable energy sources — known as the renewable portfolio standard (RPS).

Current law requires 25 percent renewable energy by 2025, but Assembly Bill 206 would increase this to 50 percent by 2030 and fully 80 percent by 2040.

Such a standard would drive up power costs, kill jobs and increase the risk of brownouts and blackouts resulting from intermittent generation when the sun doesn’t shine and the wind doesn’t blow — all for the sake of some nebulous superstition that reducing carbon output will save the planet from catastrophic warming.

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.