In control of the General Assembly for the first time in a generation, Democratic lawmakers are on the verge of passing legislation that would raise the cost of construction and maintenance of schools, affordable housing, roads and other infrastructure projects critical to keeping Virginia economically competitive. Taxpayers should take note of the financial impact of these anti-competitive measures — and which campaign donors are pushing them.
Legislation already passed by their respective chambers sponsored by Senate Majority Leader Dick Saslaw (SB 182) and Del. Alfonso Lopez (HB 358) would rescind a 2012 statute requiring state agencies to use a competitive bidding process to procure public works projects and replace it with a controversial policy permitting government-mandated project labor agreements (PLAs) on state and local construction projects.
When mandated by governments, PLAs discourage nonunion contractors and subcontractors — which employ 97.8% of Virginia’s construction industry — from competing to build projects funded by taxpayer dollars.
In short, government-mandated PLAs force contractors to follow union work rules and hire most or all workers on a jobsite from specified union hiring halls and union apprenticeship programs instead of journeyman and apprentices already employed by their company. That limits the pool of bidders, since nonunion contractors don’t want to abandon their existing employees and quality-control practices — key components of a safe and productive workplace — for strangers from union halls governed by unfamiliar rules.
In addition, any nonunion workers permitted on a PLA project lose an estimated 20% of wages and benefits earned on the job unless they accept union representation, join a specific union, pay membership dues and meet the union benefits plan’s vesting requirements.
Studies on the effect of government-mandated PLAs in Connecticut, California, New York, Massachusetts, New Jersey and Ohio found PLAs increase the cost of school construction by 12% to 20%. Virginia simply cannot afford such waste with so many infrastructure and school construction needs.
For these reasons, a total of 25 states, including Virginia, outlaw government-mandated PLAs on public works projects, thereby ensuring fair and open competition on taxpayer-funded construction projects so the public can get the best possible construction project at the best possible price.
It is no surprise that construction unions and their members — who make up just 2.2% of Virginia’s private construction workforce — have made passage of these pro-PLA bills, along with legislation allowing government-determined prevailing wage regulations on state and local public works projects (SB 8/HB 833), a top priority this legislative session. It will mean more contracts for union-signatory contractors and more jobs for union members, likely from out of state.
If these bills become law, large companies and their unionized workforce from Maryland, Washington, D.C., and other states would have an unfair advantage and disrupt the local market at the expense of the commonwealth’s small businesses and skilled construction workforce. In addition, Virginia’s small, women- and minority-owned businesses will be harmed, because they are predominately nonunion and will be discouraged from competing for projects subject to these special-interest schemes.
So why are Democrats pushing these costly, anti-competitive measures? It isn’t a coincidence that 46 construction unions gave a total of $1.64 million in direct contributions to Democratic political campaigns during Virginia’s 2018-19 cycle, according to campaign filings compiled by the Virginia Public Access Project, a nonprofit that monitors campaign contributions by special interest groups. Almost 60% of these political contributions came from out-of-state construction unions with a vested interest in getting the Virginia’s new leadership to stifle competition from local and qualified businesses.
Lawmakers in Hampton Roads recognize the value of the commonwealth investing in schools and infrastructure to keep Virginia economically competitive and create jobs for Virginia’s construction industry, which is why Dels. James Leftwich and John Cosgrove and Sens. Lionell Spruill Sr. and Cliff Hayes must oppose these costly and unnecessary bills.
Eric Stichler, president of Heartland Construction Inc. in Chesapeake, wrote this on behalf of the Virginia chapter of Associated Builders and Contractors.
