The Oregonian shreds Kotek’s costly union hand-out

By Taxpayers Association of Oregon
OregonWatchdog.com

The Oregonian Editorial Board slammed Governor Tina Kotek’s new order calling for future public projects to be done through extremely costly and time-consuming Project Labor Agreements.

As of Sunday morning, the online edition of this editorial was not posted, so we offer some early highlights:

“Kotek’s order mandating  PLA’s for state projects in which labor accounts for 15% of the cost not only escalates that battle, but appears to go beyond what any other state has in place.  Oregon once again is at the forefront of an economic experience that shows little, if any, upside for the public.  Kotek contends that her executive order will provide more certainty and help control expenses because the project labor agreements will prohibit strikes and other costly work stoppages.  However, her office could not point to a single such incident…”

The Oregonian Editorial Board also said, “…the solution Kotek offers is baffling. Her office contends that “broad usage and acceptance of the tool will address this issue moving forward”  So, increasing the cost of doing business on more projects will someone how result in a lot more bids and lower estimates?  That’s some funky math”

The Oregon Business & Industry has previously explained how damaging this executive order will become in a press release, “In effect, the governor’s executive order requires the use of collective bargaining agreements for most state-funded projects for which onsite labor costs will make up at least 15% of total costs. Anyone who operates a business knows that labor costs will always exceed 15%, so this means this effectively applies to all projects using state funds with only very minor exemptions. The requirement will apply to all contractors and subcontractors even if their employees are not themselves represented by a union…It is inappropriate, however, for the governor’s office to impose de facto union representation on employees who have not sought union representation themselves. It is also inappropriate to do this by sweeping executive fiat.  Executive Order 24-31 will be particularly harmful for small and local contractors, who are much less able to absorb additional costs associated with PLAs. That means that small and emerging contractors will almost certainly either be outbid for these projects or opt not to bid for them at all.The executive order will be costly for taxpayers as well. Imposing collective-bargaining requirements on all businesses participating in state-funded projects will reduce the buying power of Oregonians’ hard-earned tax dollars. This will require more tax revenue to complete the same number of projects, increasing the chances of tax hikes, or reduce the work that can be done with existing revenue, leading to fewer outcomes for a state with significant infrastructure needs. “

The Willamette Week noted this opposition by Associated General Contractors, “But AGC executive director Mike Salsgiver took issue with the governor’s reasoning—and noted that she issued her order without consulting his organization, which represents a broad spectrum of contractors, from the state’s largest builders to mom-and-pop operations. He says AGC is not opposed to all project labor agreements; it objects to Kotek requiring them in all instances that meet what AGC believes is a modest threshold … mandating union-only agreements on every major project adds costs, reduces competition, and shuts out small minority and emerging contractors who are vital to Oregon’s economy,” Salsgiver said.Although many of the contractors who erect large buildings or work on publicly funded projects, such as the renovation of the state Capitol or Portland International Airport, are union shops, Salsgiver says many of the firms that build highway projects are non-union.“About 80% of the contractors on the highway side are non-union,”.”

In review, Governor Kotek’s executive order is:

(1) unnecessary
(2) costly
(3) uses bad math
(4) makes statements that could not be verified to the press
(5) hurts small contractors
(6) hurts minority contractors and
(7) was done without consulting the industries impacted.

Good for The Oregonian calling out this sucker-deal for what it is.

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