Trump can still score an infrastructure win

By now it’s clear that Democrats are not interested in working with President Trump and Republicans in Congress on a comprehensive infrastructure deal that could have been a significant legislative win leading into the 2020 election. House Democrats’ increased focus on investigation over legislation all but doomed the deal, and Congress is unlikely to pass a big and bold infrastructure bill in the foreseeable future.

However, that doesn’t mean America’s infrastructure spending deficit and poorly maintained electrical, water and transportation assets are no longer a priority. The good news is Congress can and likely will address infrastructure needs through traditional legislative vehicles, but on a smaller scale relative to the transformative numbers targeted by the administration and some lawmakers.  

In addition, President Trump can lead on infrastructure without Congress by making federal and federally assisted construction projects more affordable for taxpayers by cutting red tape and instituting common-sense regulatory reforms through executive action.

Many states are already making infrastructure a priority by ensuring taxpayer investments in infrastructure are subject to robust competition and fiscal responsibility Americans deserve from government.

For example, on June 2, Gov. Greg Abbott signed HB 985, the Neutrality in State Government Contracting Act, making Texas the 25^th state to invite all of its construction industry to compete for taxpayer-funded contracts to build state public works projects.

It’s a win-win for taxpayers and the construction industry. The measure helps taxpayers get the best possible construction projects at the best possible price by increasing competition. It will also create jobs for local construction workers and qualified small businesses seeking to rebuild their communities.  

Unfortunately, lawmakers in many blue states and cities are enacting contrary policies by subjecting federally funded public works projects to anti-competitive, costly and controversial project labor agreement mandates. 

When mandated by a government entity, PLAs typically force builders, whether union or not, to follow inefficient union work rules and hire most or all workers on a jobsite from union hiring halls and apprenticeship programs. That effectively limits the pool of bidders, since nonunion contractors don’t want to abandon their quality control practices and their own journeymen and apprentices—a key competitive advantage and ingredient for a safe and productive jobsite—for strangers from union halls governed by unfamiliar rules.

The negative impact of government-mandated PLAs on nonunion construction workers, who comprise 87.2 percent of the U.S. private construction workforce, is especially severe. They lose wages and benefits contributed to union plans during the life of a typical PLA project unless they join a union and/or pay union fees and meet plan vesting requirements.

The intent of many lawmakers promoting government-mandated PLAs is purely political—to create jobs for union labor and steer contracts to unionized contractors supporting their campaigns. But the effect is to drive up costs.
A May 2017 study by the Beacon Hill Institute found that PLAs raised the base construction cost of Ohio schools by 13 percent—$23 per square foot in 2016 prices—relative to non-PLA projects. Studies of the effect of PLA mandates on California, New Jersey, New York, Connecticut and Massachusetts school construction reached similar conclusions—PLAs increase the cost of construction by 12 percent to 18 percent. 

Proponents of PLAs claim they prevent cost overruns and delays by discouraging strikes. As President Trump knows from private sector experience, however, the mere presence of a PLA won’t prevent union members from going on strike. In 2006, three unions building the Trump hotel in downtown Chicago walked off the job, despite a no-strike clause in the project’s PLA.

In 2001, President Bush signed executive orders that barred government-mandated PLAs on federal and federally assisted projects, which President Obama reversed in 2009. President Obama’s executive order, which remains in effect today, encourages PLA mandates on federal projects over $25 million on a case-by-case basis and allows state and local government recipients of federal funds to require them.

Likewise, union-friendly blue cities and state governments in California, Connecticut, Hawaii, Illinois, New Jersey, New York and Washington have policies encouraging PLAs on local and state projects often financed with federal investments, further wasting valuable federal infrastructure dollars.

It should come as little surprise that PLAs have been mandated on budget-busting federally assisted boondoggles like Honolulu’s Rail Project, the California High Speed Rail to nowhere and Seattle’s Highway 99 tunnel, which suffered from delays, safety issues, cost overruns, strikes, diversity concerns and worse, despite the alleged promises of a PLA.

Not a single state carried by President Trump in the 2016 election promotes government-mandated PLAs. Why should millions of voters who enjoy free and open competition on state-funded construction projects in Wisconsin, Florida, North Carolina, Michigan, Iowa and 20 other states have to settle for less value for their tax dollars on federally funded projects in blue states? President Trump could take a critical step towards ensuring that all Americans and qualified businesses compete on a level playing field to rebuild America’s vital infrastructure by signing an executive order prohibiting PLA mandates on federal and federally assisted projects.

Ben Brubeck is the vice president of regulatory, labor and state affairs for the Associated Builders and Contractors.