Missouri Passes Law Restricting Government-Mandated Project Labor Agreements

0 May 31, 2017  State & Local Construction

Yesterday Gov. Eric Greitens (R-Mo.) signed legislation into law that will promote fair and open competition on contracts for construction services funded by Missouri taxpayers. SB 182, the Fairness in Public Construction Act, ensures controversial project labor agreements (PLAs) cannot be mandated by the government on state, state-assisted and local construction projects, guaranteeing that almost three out of four members of Missouri’s private construction workforce who have chosen not to join a labor union can fairly compete to work on projects funded by their own tax dollars.

Rep. Rob Vescovo, Sen. Bob Onder, Wisconsin Gov. Scott Walker, and others watch Missouri Gov. Eric Greitens sign SB 182 at the event in Earth City on May 30, 2017.

“Project Labor Agreements drive up the cost of construction and kill jobs,” Greitens said in a state prior to the bill signing (Greitens signs PLA bill into law with fellow governor Scott Walker watching, 5/30/17). “Our top priority is more jobs for the people. We’re eliminating this sweetheart deal for special interests, protecting taxpayers, and creating more opportunity for all workers in Missouri.”

“We need to be able to invest in infrastructure. Schools need to be fixed, courthouses need to be rebuilt, and libraries need to be repaired,” said Greitens at the bill signing. “But we should be paying a fair price. And in the past, too often, we weren’t.”

“Taxpayers cannot receive the best product at the best price from responsible contractors when government caters to special interests by mandating PLAs, which steer contracts to unionized firms. This creates a labor monopoly for unionized workers, who make up about a quarter of Missouri’s private construction workforce and just 14 percent of the construction industry nationally,” said ABC Vice President of Regulatory, Labor & State Affairs Ben Brubeck. “As Congress and the Trump administration consider a $1 trillion infrastructure proposal, they should follow the lead of Missouri and 22 other states by immediately enacting a similar policy that will maximize competition, reduce costs and guarantee the fiscal accountability taxpayers deserve on federal and federally funded construction projects.”

“Missouri’s merit shop construction community thanks Gov. Greitens and appreciates the leadership of bill sponsors Sen. Bob Onder and Rep. Rob Vescovo in crafting this important legislation to increase competition and provide better value to taxpayers and more opportunity for Missouri businesses,” said ABC Heart of America President Michele Roberts-Bauer. “Current state law only prohibits government-mandated PLAs on projects with 50 percent or more of state funding, so SB 182 extends fair and open competition protections to a larger portion of government contracting opportunities, resulting in more jobs for quality Missouri contractors and their skilled workforce.”

According to The Kansas City Star (Greitens signs bill scrapping union requirements with Wisconsin governor looking on, 5/30/17):

The Republican-led General Assembly passed legislation earlier this year that would ban the practice, and any government that violates the law would lose state funding and tax credits for two years.

“This is a pro-taxpayer bill,” said state Rep. Rob Vescovo, a Jefferson County Republican who sponsored the bill. “It is not an anti-union bill.”

Sen. Bob Onder, a St. Charles County Republican who also sponsored the bill, said its implementation will end “waste and unjustified discrimination while using the free market to save taxpayer dollars.”

When mandated by a government agency on taxpayer-funded projects, PLAs drive up the cost of construction projects between 12 percent and 18 percent, according to a series of academic studies. A study published last week found Ohio school projects subject to government-mandated PLAs were 13 percent more expensive compared to school projects not built with PLA mandates.

PLAs typically ensure construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of existing qualified employees; obtain apprentices through union apprenticeship programs; follow inefficient union work rules; pay into union benefit and multi-employer pension plans workers will never benefit from unless they meet vesting requirements; and force workers to pay union dues and/or join a union as a condition of employment.

SB 182 does not impact Missouri’s state prevailing wage law, which requires union and nonunion contractors and subcontractors providing construction services on public works contracts to pay construction workers at least a government-determined wage rate. Missouri’s government-determined prevailing wage rates are typically union scale, meaning they are set by the government using union collective bargaining agreements. All public works contractors will still be required to pay Missouri’s prevailing wage rates after SB 182 is enacted.

Missouri is one of 23 states that require government neutrality toward PLAs on taxpayer-funded construction projects. Wisconsin and Iowa enacted similar laws on April 17 and April 13, respectively. Such measures permit contractors to voluntarily enter into PLAs but prohibit the government from requiring PLAs on publicly financed construction projects, which increases competition and provides value to taxpayers.

Gov. Scott Walker was on hand to witness Gov. Greitens sign SB 182 into law. According to St. Louis Public Radio (Greitens signs 2nd union restriction of year into law; gets backing from Wisconsin governor, 5/30/17):

Walker, who made an unsuccessful bid for president in 2016 and now heads the Republican Governors Association, said banning PLAs is part of a national trend to help taxpayers and encourage economic growth.

“That’s what we’re talking about today, freedom and leveling the playing field,’’ Walker said.

At the federal level, ABC and a coalition of construction and industry stakeholders asked President-elect Trump to issue an executive order to prohibit government-mandated PLAs on billions of dollars’ worth of federal and federally assisted projects, reversing President Obama’s pro-PLA Executive Order 13502, which allows state and local governments receiving federal funds to mandate PLAs and encourages federal agencies to mandate PLAs on federal construction projects exceeding $25 million, on a case-by-case basis.

On March 28, a U.S. House of Representatives committee favorably reported the ABC-supported Fair and Open Competition Act (H.R. 1552) out of committee. The bill, introduced by Rep. Dennis Ross (R-Fla.), would extend neutrality toward the use of PLAs to federal and federally assisted construction contracts. The bill (S. 622) was also introduced in the U.S. Senate by Sen. Jeff Flake (R-Ariz.).

Further reading:

ABC Heart of America Press Release
ABC National Press Release

This post was written by and tagged Tags:, , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *