By Bill Wilson — A Feb. 14 Wall Street Journal editorial calls on New Jersey Gov. Chris Christie to veto legislation that would require projects in state costing $5 million or more to utilize project labor agreements (PLAs), pointing to two studies that ought to give the Governor pause.
This is an important issue, not only because of the greater costs associated with PLAs, but politically has implications for Christie, who faces reelection this year and may run for president in 2016.
A conservative estimate by the Beacon Hill Institute at Suffolk University has found that “PLAs increase the cost of construction by 12 percent to 18 percent,” comparing the period when PLAs were prohibited under federal law to when they were not.
That means if PLAs are used to repair the damage from Hurricane Sandy they will do so with less bang for the buck: anywhere from 10.7 percent to 15.2 percent less reconstruction would occur in New Jersey as a result.
New Jersey’s own Department of Labor and Workforce Development found that public school construction utilizing PLAs cost 30.5 percent more than non-PLA construction projects.
If accurate, that would mean an even worse 23.3 percent less reconstruction would occur if PLAs are utilized, hardly a responsible use of limited resources in the case of hurricane relief.
Moreover, the New Jersey study found that projects took considerably more time to complete. At a time when the citizens of New Jersey desperately long to get back to normal, construction delays combined with greater costs are simply unacceptable.
The simple math shows that PLAs are not in the public interest, nor that of taxpayers’. They are solely in the interest of labor organizations that will make more money if they are utilized.
This leaves Christie with the choice of favoring spending more money to achieve less, or to veto this legislation, achieving more for the taxpayers at a lower cost.
Politically, however, the decision could be more treacherous. Unions still have a strong presence in New Jersey, and Christie might want to boost his reelection prospects by throwing a bone to big labor. But doing so could be fatal to a 2016 presidential bid in the Republican primary.
But those waters are navigable. Christie built his reputation in 2009 by running as a fiscal conservative. As the Journal editorial board notes, in 2009 Christie opposed PLAs, calling them “special interest labor union giveaways that increase spending and taxes.”
It would be inexplicable for Christie to now sign legislation that ensures union contracts would be more expensive, making a veto a no-brainer.
Bill Wilson is the President of Americans for Limited Government.