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.

Odds and ends number 73

As I often do, here’s a collection of little items which grow to become one BIG item. And I have a LOT of them – so read fast.

For example, I learned the other day that Richard Rothschild, who spoke so passionately about private property rights (and the Constitution in general) will be back in our area Saturday, March 2nd as the speaker for Dorchester County’s Lincoln Day Dinner. That’s being held at the Elks Lodge outside Cambridge beginning at 3 p.m. Tickets, which are just $30, are available through the county party.

While Rothschild is the featured speaker, you shouldn’t miss some of the others scheduled to grace the podium, particularly gubernatorial candidates Charles Lollar and Blaine Young as well as Congressman Andy Harris. For a small county like Dorchester, that’s quite a lineup!

The controversy over the Septic Bill is far from the only item liberty-minded Marylanders have to worry about. Over the last few weeks, I’ve been bombarded with notices over a number of issues.

For example, after what State Senator E.J. Pipkin termed as a “structural failure” regarding hearing testimony on Senate Bill 281 (the gun-grabber bill) he offered an amendment to the Senate rules to handle these cases. However, I could not find a follow-up to that bill.

What I could find, though, was Pipkin’s statement that the state was making citizens into criminals, stating “The penalties embedded within the Governor’s Gun Control bill are extreme; they would criminalize paperwork errors in ways that destroy careers, lives, and families.” And he’s absolutely correct.

“This bill does not address the issue of gun violence in Maryland. The real issue is illegal firearms in Maryland, something the Governor’s bill does not target,” Pipkin concluded.

But guns aren’t the only problem. Unfortunately, we are one step closer to an offshore wind boondoggle in Maryland despite the best efforts of those who deal in the realm of reality to stop it. One bastion of sanity in Maryland is Change Maryland, whose Chair Larry Hogan expressed the following regarding offshore wind:

It seems Martin O’Malley’s priority is to make electricity and gas more expensive. He is pushing an increase in the gas tax and pushing a wind energy policy that is not cost effective and guarantees that electricity will be more expensive for rate payers.

At the close of the last session, the governor ignored the budgeting process which resulted in a train wreck.  Instead he was out on the steps of the capital, leading wind energy activists in chant that said ‘all we re saying is give wind a chance.’

There are no assurances that this offshore wind proposal will not devolve into crony-capitalism that reward friends of the governor and political donors.

Actually, Hogan slightly misses the point because true capitalism would occur when the market continues to shun the expense and non-reliability of offshore wind. I guarantee that if this project goes through it will cost those of us who use electricity in Maryland a LOT more than $1.50 a month – subsidies can always change, just like tax rates on casinos.

The aforementioned Pipkin also weighed in on offshore wind:

This legislation may represent a shift in how private business is done in and regulated by the state.

This bill requires the Public Service Commission (PSC) to weigh new criteria in approving private development contracts to build off-shore wind turbines.  The Commission will now consider prevailing wage and Minority Business Enterprise (MBE) participation as criteria in its contract award.

This could set new precedent. In the future, we could see every business now regulated by a state agency subject to prevailing wage and MBE requirements.

You think? Our Big Labor-friendly governor stops at nothing – nothing – to grease the skids for his union cronies. And surely this will extend to whatever road work is performed once the gas tax is increased by O’Malley and General Assembly Democrats. Wait, did I say road work? Hogan and Change Maryland question that assumption, too:

Change Maryland Chairman Larry Hogan backed transportation reform which has emerged as a key issue this legislative session after several years of being relegated to the back burner.  Specifically, key members of the Maryland House of Delegates are advocating guiding principles to ensure much-needed investments are made in infrastructure and fundamental reforms made to transportation policy.

“Previous attempts to improve our transportation network in Maryland have been an abject failure. Our top elected officials are saying roads and bridges are crumbling, but what they won’t tell you is they are the ones who caused the problem in the first place,” said Hogan.  “Another myth that is being foisted upon us is that there is an urgent need to raise the gasoline tax, and that is simply not true.”

Hogan joins Del. Susan Krebs and other House members in instilling common-sense policy solutions to making transportation policy.  These include protecting the transportation trust fund with a constitutional amendment, realigning infrastructure investments to reflect how Marylanders actually travel and restoring funds for transportation. (Emphasis mine.)

I highlighted the above phrase as a way to say, “bingo!” That, folks, is the problem in a nutshell.

This is a state which jacked up the tolls on the Bay Bridge to create a cash cow for other projects which don’t pay their own way, like the Inter-County Connector outside Washington. O’Malley’s gas tax is really intended to build rail lines most of us will never ride rather than build projects we could use, like perhaps a limited-access Easton bypass for U.S. 50, widening Maryland Route 90 into Ocean City, or building an interchange at the dangerous U.S. 113 – Maryland Route 12 intersection in Worcester County.

The gas tax proposal has led to acrimony in Annapolis, as Delegate Kathy Szeliga points out:

(Senate President Mike) Miller called House Republicans who oppose his gas tax proposal, “Neanderthals,” and “obstructionists.” In response to his comments, Delegate Szeliga tweeted, “Yabba-dabba-do, Mr. Miller,” further commenting that she hopes to obstruct and stop this massive 70% increase in the gas tax and government expansion. In response to Senator Miller’s jabs at Republicans, Delegate Herb McMillan added, “Even a caveman can see that it’s stupid to raise gas taxes when there’s no guarantee they’ll be used for roads.”

Kidding aside, you can call me a “total obstructionist” as well, Senator Miller. On the road to serfdom someone has to stand in the way, and I’m one of those someones.

Notice that I haven’t even talked about the federal government yet. One sure sign of a new year, though, is the ubiquitous Congressional scorecard. Two organizations which have released theirs recently are Americans for Prosperity and Heritage Action for America.

Not surprisingly, Harris scored a 95% grade from AFP, leading the Maryland delegation – former Congressman Roscoe Bartlett had the second highest grade at 91%. As for the rest, well, their COMBINED score was 50 percent. Heritage Action, however, graded Andy more harshly with an 81% grade (Bartlett scored 67%.) Once again, the remainder of Maryland’s delegation scored anywhere from a lackluster 17% to a pathetic 4 percent.

We’re also talking about immigration reform more these days. I happen to lean somewhat on the hawkish side, so I believe these reports from the Center for Immigration Studies are worth discussing. In one, former Congressman Virgil Goode of Virginia looks at what happened the last time we went down this road insofar as collecting back taxes from illegal aliens – a key part of the compromise provision – was handled after the 1986 reform.

The second CIS report looks at recommendations the bipartisan Jordan Commission made in 1997, after the 1986 immigration amnesty program failed. This middle ground made five recommendations:

  • Integrate the immigrants now in the United States more thoroughly;
  • Reduce the total number of legal immigrants to about 550,000 a year;
  • Rationalize the nonimmigrant visa programs and regulate them;
  • Enforce the immigration law vigorously with no further amnesties; and
  • Re-organize the management of the immigration processes within the government.

That seems like a pretty good starting point to work from, particularly the first recommendation.

Another study worth reading is this one from Competitive Enterprise Institute called “The Wages of Sin Taxes.” In it, author Chris Snowden takes an unflinching look at who really pays for these tolls. As CEI states in their summary:

Most remarkably, Snowdon, a fellow at the Adam Smith Institute in London, demonstrates that financial burden supposedly placed on society through the consumption of alcohol, tobacco, high-calorie foods, has little basis in reality. The myth that these “sinners” cost the rest of us money is perpetuated in large part because “government has no incentive to tell the public that these groups are being exploited, and the affected industries dare not advertise the savings that come from lives being cut short by excessive use of their products.”  This type of tax is actually a regressive “stealth tax” that allows lawmakers to take money from their constituents with the lowest incomes without the pushback an upfront tax would provoke.

I would put that in the category of “duh.”  Ask yourself: how much state-sanctioned money and effort do you see given by government to prevent drinking, smoking, and gambling? Yet they rake their cut off the top in each of these three vices, which are only legal because government and society have compromised on these issues.

On the other hand, those who grow or smoke marijuana or do other illegal drugs are considered criminals and tossed in jail or fined. The same is true with prostitutes in most locales. If there were tax money to be made, though, and societal mores shifted ever-so-slightly toward a more libertarian viewpoint with regards to these self-inflicted actions, they would be legal – but you’d certainly still see the public service announcements about “just say no” or the dangers of selling one’s body. (Oddly enough, I doubt we buy time around the world to warn about the dangers of illegally immigrating to the United States. Why do you think that is?)

And I don’t think items like this upcoming movie will help the libertarian cause – not because of the message per se, but the poor quality of the animation. It reminds me of those cheesy Xtranormal movies people make, sorry to say.

I also have a couple items – as I get closer to wrapping this up – that I think are worth reading. Paul Jacobs is on Townhall giving our state a little tough love regarding the drive to tighten petition rules (in a state where it’s already very difficult to succeed) while Mike Shedlock is there making a point I’ve made for several years – my daughter’s generation is being hosed.

While he’s a little bit older than the Millennial Generation, I think Dan Bongino can relate. This video is now going viral on Youtube, in part thanks to the Blaze.

Finally, I think it’s worth alerting my readers that this may be the last edition of odds and ends for awhile. No, I’m not going anywhere but in the interest of bringing more readership I’m in the process of exploring the concept of a quicker posting tempo which may or may not feature shorter posts.

I’ve always felt the ideal post was somewhere between 500 and 1,000 words, but these odds and ends posts can run 2,000 words or more. Maybe it’s better for both readers and this writer to space things out and perhaps devote 200-300 words to an item rather than wait and collect a bunch of items which could get stale after a week or two. I can’t always control the length of my Ten Question Tuesday posts or ones where I report on an event, but I can work with items like these and see what’s truly worth writing about.

As the political world and internet evolve, I think the time is right to change up the mix and tempo here just a little bit. Certainly I won’t get to a point where I’m simply rehashing press releases but I think it’s a better use of my time to shorten the average post I write.

So there you have it: another post which weighs in at 2,000 words, exactly.