Tag: Davis-Bacon Act

Odds and ends number 102

I’m bringing back those chunks of blogging goodness that take anywhere from a couple sentences to a handful of paragraphs.

A surplus? Give it back!

It’s been a tough year for state governments around the nation, and Delaware was no exception. But there was a surprise when the First State beancounters came up with the numbers at the end of the year – we had a $347 million surplus thanks to record real estate transfer taxes and very successful IPOs.

Of course, just because we have an extra $347 million doesn’t mean the state won’t have plans for the money that don’t involve returning it to the hard-working taxpayers of Delaware. But I also noticed this nugget: “At one time, far more people came into Delaware to work, but it’s been closer to 50-50 recently, officials said Monday. And many of those who leave Delaware, but are now working at home, have higher paying jobs than those coming from out of state to work in Delaware.” I’m one of those 65,000 who leave Delaware to work, which was the reverse of where we were before we moved when my wife was one of the 65,000 who came into Delaware to work. Neither of us have a typical “work from home” job (although mine is a more likely candidate – not counting the side hustles I actually do from the comfort of my rocking chair) so the gig economy hasn’t hit us yet.

If they are taxing us too much, give it back. If they’re not taxing us enough; well, we don’t need everything the state spends its money on.

A little help from their friends

We had some issues in Texas a couple weeks back, and in the spirit of never letting a crisis go to waste, the left-leaners at the Alliance for American Manufacturing are now demanding a “Made in America” infrastructure bill. As Texas resident Elizabeth Brotherton-Bunch wrote at the group’s behest:

It didn’t have to be like this. While we are seeing unusual weather in Texas, the electric grid here also hasn’t received updates it has needed for years. As one expert put it, the grid “limped along on underinvestment and neglect until it finally broke under predictable circumstances.”

And it’s not just Texas. States like Oregon, Kentucky and Louisiana also are seeing power outages right now. California faced similar struggles last year.

These are the real world consequences of America’s failure to modernize its infrastructure. Now it’s time to learn from our mistakes and get to work.

“TAKE ACTION: What Happened in Texas Could Happen Anywhere”, Alliance for American Manufacturing, February 18, 2021

In fact, in the e-mail, Brotherton-Bunch actually says, “The crisis in Texas this week once again is highlighting the consequences of inaction. But every crisis also yields opportunity.”

Suppose, however, that the federal infrastructure bill did away with Davis-Bacon laws that add labor costs to the project unnecessarily. Sure, the leftist groups that back prevailing wage will tell you that the increased wage brings an increase in productivity, but to me that claim is rather dubious. Surely the reason the AAM really wants the infrastructure bill is to prop up their union backers – just like the push for an overall $15 minimum wage most benefits Big Labor in general and the SEIU in particular – moreover, if it goes to things the federal government may want that may not be what the locality needs.

Infrastructure in most cases should be more of a state priority. We’ve spent enough federal money for three lifetimes in mine, but those in power now want to put drunken sailors to shame. I guess the AAM just wants their cut.

The hopeful tone didn’t age well

Just days before Joe Biden’s inauguration, Bobby Jindal – the two-term governor of Louisiana and 2016 Republican presidential candidate (the one I endorsed initially) placed an op-ed at the Fox News site that sounded conciliatory toward the incoming administration, pointing out areas of common ground between the perceived moderate Biden and populist Republicans that backed Trump. In part, this was because President Trump…

…modified the traditional conservative argument that the problem was government was doing too much for too many — and instead argued it was not doing enough for the right people.

Trump expanded the definition of the deserving poor to include everyday working families whose wages had stagnated for years. Democrats have long used similar arguments to enact universal social welfare programs. President Obama cited the plight of working Americans to include both Medicaid expansion for the poor and exchange subsidies under ObamaCare for families earning up to 400% of the federal poverty level.

And Trump tapped into working-class anxiety by promising to pursue policies, like tighter immigration controls, tariffs, farm aid, and renegotiated trade deals, that would protect their jobs and incomes from unfair foreign competition.

Trump further promised to protect entitlement programs like Medicare and Social Security that benefited his base supporters, while railing against a corrupt Washington establishment that conspired to enrich the coastal elites and expand wasteful redistribution programs for favored liberal constituencies.

But Trump seemed more interested in adding spending he liked — such as military spending, his border wall, his long-promised infrastructure bill, and direct pandemic assistance — than in eliminating spending he did not like.

“Bobby Jindal: Biden may find support for some proposals among populist Republicans in Congress,” FoxNews.com, January 17, 2021.

This big-government populism was the philosophy candidates like Lauren Witzke ran on last year.

I would agree with Jindal except for the fact that Democrats inside the Beltway seldom backed Trump’s initiatives despite the fact that a significant number of rank-and-file Democrats in the Rust Belt and other areas of flyover country eschewed the 2016 Democrat standardbearer Hillary Clinton to vote for Trump.

However, it should be said that the trajectory of history pre-pandemic was favoring Trump’s contention we could grow our way out of a deficit, as the annual shortages were coming down until trillions of dollars of stimulus and transfer payments were supposedly made necessary thanks to the “15 days to stop the spread” that are now closing in on a year in many places. Had Trump not been denied a second term he may have been proven correct.

But it was disappointing to read this from a man who was a successful budget-cutter in his home state, making the tough choices to save taxpayer dollars. And as an aside, one of those “common ground” issues Jindal cited was infrastructure.

First it was RGGI, now it’s TCI

It’s been percolating under the surface for quite awhile now, but when you start talking about a potential gas tax increase, people begin to listen.

It wasn’t enough to address so-called manmade climate change by developing a way for public utilities to transfer protection money to state governments (also known as the Regional Greenhouse Gas Initiative, or as the subtitle suggests, RGGI) – nope, they decided to attack the internal combustion engine in the same way. As Penny Dryden and Eleanor Fort explained at Delaware Online back in December 2020:

As Delaware faces a significant drop in tax revenue due to the pandemic, the Transportation and Climate Initiative (TCI) can offer needed funding for communities along Routes 13 and 40 and other pollution burdened areas across Delaware, including Route 9, Northeast Wilmington, Belvedere Newport and Sussex County. TCI is a collaboration between eleven northeast and mid-Atlantic governors and the mayor of Washington, D.C., who have been working to develop a regional cap and invest program that would significantly cut tailpipe pollution while building a fair and just zero-emission transportation system.

“Building a transportation and climate initiative that works for Delaware,” Penny Dryden and Eleanor Fort, Delaware Online, December 17, 2020.

Never mind I put the lie to the tax revenue claim a few paragraphs ago, but the duo are only following what was laid out a couple years earlier as goals for the TCI:

Informed by input from hundreds of stakeholders and expert analysis, the participating TCI jurisdictions will design a regional low-carbon transportation policy proposal that would cap and reduce carbon emissions from the combustion of transportation fuels through a cap-and-invest program or other pricing mechanism, and allow each TCI jurisdiction to invest proceeds from the program into low-carbon and more resilient transportation infrastructure. This proposed program, when combined with existing programs and complementary policies, will be designed to achieve substantial reductions in transportation sector emissions and provide net economic and social benefits for participating states.

“Transportation and Climate Initiative Statement,” December 18, 2018.

Welcome to wealth transfer program part two, where rural folks and those who drive for business or pleasure will be transferring their wealth and freedom into more government largesse that will go to boondoggles they pick because the public won’t. In an Open Letter on the Transportation and Climate Initiative, a number of groups advocating the rightsizing of government in these affected states and beyond called TCI “the wrong idea at the wrong time.” And in case you haven’t noticed, gas that was around $2.19 a gallon back in November has gone up 50 cents a gallon since – granted, some of that is normal (it seems like gas prices annually peak in the late spring) but the recent 20 cent surge blamed on Texas refineries being kicked offline thanks to the massive snowstorm there will take its sweet time to work itself out. Yet to someone who drives a 20 MPG truck 20,000 miles a year such as a rural worker, that per-gallon increase works out to $500 a year they can’t spend on food, clothing, or other necessities. A 27-cent gas tax increase such as the one the Caesar Rodney Institute has worried could be proposed for Delaware would cost that Sussex County worker $270 a year on top of the 50-cent increase.

Something on a favored flag

I suppose that since I wrote a book with it on the cover, one would consider my flag of choice the Gadsden flag. That yellow-and-black symbol of our colonial days became the icon of the TEA Party, and it got a little bit of its due recently thanks to my Ammo.com friend Sam Jacobs pushing an article on it.

Every so often I see a Gadsden flag adorning a pole under an American flag or see a Virginia Gadsden license plate – surprised those haven’t been banned from the state yet. (I just checked and they are still available, shockingly enough. But I doubt there’s any in the D.C. suburbs.) It’s comforting to know there are still people like me out there.

And since I now have an open space on the front of my car because Delaware only requires one license plate, maybe I can find a Gadsden plate to increase my old car’s value. (15 years old, almost 200,000 miles that would have been a lot of gas tax for greedy governments around the nation.)

Programming note

I have one more item in my e-mail box that will graduate to a full-length article, I believe. Be advised, though: writing may be a little sparse for a bit as I seem to be the snake that swallowed the goat and that big lump of various side hustles is making its way through my workload these days.

And speaking of the TEA Party, I believe I noted that I deactivated my old Rise and Fall website a couple months back. I think the Facebook page for it will be next to go. Last year I abandoned a book project that became a series of posts here on the Indivisible movement, and I started on another idea I had for an e-book before pulling the plug because I didn’t like how I thought I had to frame it – too unworkable. To be honest, right now is not the time in my life for a book.

So I guess I will stay in this little forum for now.

An overstatement by Sauerbrey?

Writing recently about the concept of “prevailing wage,” two-time gubernatorial candidate Ellen Sauerbrey used the letter to the editor to praise her apparent choice for governor, David Craig. Here’s the letter in its entirety, as posted on Southern Maryland News Net. I received it as an e-mail under Craig’s campaign letterhead.

I want to point out a specific passage for comment, in particular the one where Sauerbrey speaks about Craig himself and attributes statements to him.

The 2014 General Assembly has passed legislation to apply the prevailing wage to additional local government projects that receive partial state funding. The prevailing wage which is essentially the union wage, artificially inflates labor costs by ab (sic) estimated 30% to 50%.

I commend Harford County Executive and Gubernatorial candidate David Craig for speaking out on the impact of the new law on his county, as well as the impact of prevailing wages on the state budget. Every local elected official concerned about getting the most value on public projects should want to let the market determine employee wages as is done in the private sector. County Executive Craig points out that the prevailing wage adds an additional $30 million cost to his county’s $300 million capital budget for school construction.

It may not surprise you that I have some familiarity with school construction. In the 1990s, thanks to a court decision, the state of Ohio went on a multi-billion dollar spending binge to construct new schools in practically every one of Ohio’s 600-plus school districts. (I spent seven years working for an architectural firm which specialized in schools, although I had left that company before the boom in school construction began.) In 1997 the state created an exemption to prevailing wage regulations for schools, and in that debate numbers similar to the 30 to 50 percent savings were bandied about by proponents of the measure eliminating prevailing wage.

Also mandated at the time, however, was a report to be delivered five years later, in 2002. In this report, the research indicated savings were more in the ten percent range. While that is a great savings to the taxpayer, it’s not the panacea proponents were anticipating when the bill was passed. Granted, with the vast volume of work going on at the time there was less incentive for low bids – perhaps an economic climate such as today’s would yield more significant savings.

While Sauerbrey uses the hyperbole of the 50 percent savings in her letter, it should be pointed out that David Craig’s statement within seems to ring true – out of $300 million, the $30 million addition seems to line up with the data from Ohio’s study.

But regardless of the actual savings, there is a philosophical argument to be made against the concept of an artificially-created “prevailing” wage, simply because it doesn’t necessarily reflect the true conditions of the actual labor market. I can completely understand the contention that projects completed under prevailing wage (more often than not by union shops) have a better quality to them, as one advantage of using union tradesmen borne out in my experience is that they are better trained, so the question is one of whether they are worth the premium. In some cases I would say yes, but I’m not sure schools are structures complex enough to justify the extra cost – certainly not to the extent of a health care facility or technology-heavy factory where fit and finish can be most important.

I also find it interesting that on the one hand Democrats tend to be for cherished union giveaways like prevailing wage, but do nothing on the other but encourage illegal aliens to come in and undercut the market for construction labor. I haven’t seen them yet this spring, but sooner or later somewhere on Delmarva there will be three or four union carpenters holding up the “shame on” banner because someone hired non-union labor most likely mainly made up of illegal aliens. And what else do those hapless guys have to do?

In a perfect world, many advocacy groups agree that the Davis-Bacon Act which spawned the concept of prevailing wage would be repealed. (At one time even the General Accounting Office argued for repeal.) There is even a bill in the House of Representatives to do the same, although no action has been taken on it since introduction. (And why not?) Eliminating the federal law may well trigger some states to do away with their own versions, although if you assume Maryland politics will remain as they’re currently composed for the next couple decades you won’t find us on that list. (As I pointed out yesterday, we threaten liberals’ existence on the government teat and they know it.)

But it should be a job for General Assembly Republicans to try and roll back this year’s changes in the next session. In the meantime, while 10 percent may not seem like a lot, imagine a ten percent cut in the state budget – it would roll our expenditures back to FY2013 levels and just about negate the need for our sales tax, which is 11% of revenue according to our most recent budget. That wouldn’t be a rollback to 5%, it would be eliminating the whole enchilada to match Delaware. Or we could cut our income taxes in half.

Ten percent is a lot, even in the limited realm of state construction, and to me it’s better that the people have it than the government. In the case of the capital budget, it’s less bonding we have to pass along to our children. So let’s hope a Governor Craig would have the stiff spine to fight for such a change to prevailing wage, even if Ellen Sauerbrey was a little overly optimistic on its effects.