WHAT'S SHAPING UP TO BE ONE
OF THE MOST DIVISIVE ISSUES OF
THE 2015 GENERAL ASSEMBLY WASN'T
EVEN ON THE RADAR WHEN THE
SESSION BEGAN BACK IN JANUARY.
INDIANA'S SO-CALLED "COMMON
CONSTRUCTION WAGE" HAS BEEN
AROUND, IN ONE FORM OR ANOTHER,
SINCE 1935, SO THE EFFORT TO DO
AWAY WITH IT CAME AS A SURPRISE
TO GROUPS ON BOTH SIDES OF THE
ISSUE.
HI, I'M JON SCHWANTES, AND ON
THIS EDITION OF "INDIANA
LAWMAKERS," WE'LL DO OUR BEST TO
BRING YOU UP TO SPEED ON THE
RAPIDLY UNFOLDING DISPUTE.
HERE'S JILL SHERIDAN OF WFYI
NEWS WITH ADDITIONAL DETAILS.
THE RIGHT TO WORK PROPOSAL
ROCKED THE INDIANA STATEHOUSE IN
2011, WHEN THOUSANDS OF UNION
WORKERS DESCENDED HERE AND
DEMOCRATS WALKED OUT FOR OVER A
MONTH.
THIS SESSION THE DEBATE OVER A
MEASURE THAT COULD AFFECT
SKILLED WORKERS IN INDIANA IS
JUST HEATING UP.
INDIANA'S COMMON CONSTRUCTION
WAGE, ALSO KNOWN AS A PREVAILING
WAGE, SETS PAY RATES FOR PUBLIC
WORKS PROJECTS COSTING OVER
$350,000, INCLUDING JOBS LIKE
SCHOOLS AND ROADS.
A COUNTY COMMITTEE SETS THE
WAGES BASED ON PAST JOBS AND
WHAT OTHER SKILLED WORKERS IN
THE AREA ARE MAKING.
HOUSE BILL 1019 WOULD REPEAL THE
80-YEAR-OLD COMMON CONSTRUCTION
WAGE LAW, A MOVE THAT OPPONENTS
SAY WILL HURT THE HOOSIER
CONSTRUCTION MARKET.
PAUL NYSEWANDER, INDIANA MASON
CONTRACTORS ASSOCIATION,
EXECUTIVE DIRECTOR, SAYS THE
CURRENT LAW IS GOOD FOR THE
HOOSIER STATE.
STUDIES SHOW THAT STATES WITH
A COMMON CONSTRUCTION WAGE LAW
HAVE MORE OF THEIR WORK
COMPLETED BY IN-STATE
CONTRACTORS.
THAN OTHER STATES WITHOUT A
CONSTRUCTION WAGE LAW.
IN OTHER WORDS IF THIS LAW IS
REPEALED, WE'RE GOING TO SEE
INDIANA TAX DOLLARS PAID TO
OUT-OF-STATE CONTRACTORS TO DO
INDIANA JOBS, AND THAT'S JUST
NOT RIGHT.
1019 COULD SAVE TAXPAYERS UP TO
SUPPORTERS SAY HOUSE BILL
1019 COULD SAVE TAXPAYERS UP TO
20% ON STATE-FUNDED PROJECTS,
BUT OPPONENTS SAY THAT'S NOT
POSSIBLE BECAUSE LABOR MAKES UP
ONLY A QUARTER OF OVERALL COSTS.
BUT, J.R. GAYLOR, PRESIDENT OF
ASSOCIATED BUILDERS AND
CONTRACTORS OF INDIANA SAYS THE
SAVINGS ARE STILL ENOUGH TO
JUSTIFY A REPEAL.
WHY SHOULD THEY HAVE TO PAY
AN ARBITRARY PREMIUM WHEN, IN
FACT, THE BUILDING IS BUILT,
JUST LIKE IN THE PRIVATE SECTOR,
WITH TRAINED PEOPLE, SAFE
PEOPLE, BONDING, BUT YET THERE'S
THIS PREMIUM OF COSTS ADDED TO
THESE PROJECTS.
SO THAT'S THE PROCESS THAT WE
THINK NEEDS TO BE REPEALED.
THOUGH THE ISSUE MAY NOT BE
AS VOLATILE AS RIGHT TO WORK,
MORE UNION PROTESTS COULD BE IN
STORE BEFORE THE SESSION WRAPS
UP.
THE COMMON CONSTRUCTION WAGE
BILL PASSED THE HOUSE LAST
MONTH AND WAS REFERRED TO A
SENATE COMMITTEE.
A HEARING HAS YET TO BE
SCHEDULED.
FOR "INDIANA LAWMAKERS," I'M
JILL SHERIDAN.
THANKS, JILL.
BACK IN A MOMENT WITH OUR WEEKLY
ROUNDTABLE DISCUSSION.
"INDIANA LAWMAKERS" FROM THE
THE CONCEPT OF REQUIRING
CONTRACTORS TO PAY LOCALLY SET
WAGES FOR WORK DONE ON PUBLIC
PROJECTS IS WELL ESTABLISHED.
CONGRESS EMBRACED THE APPROACH
IN 1931 WITH THE PASSAGE OF THE
DAVIS-BACON ACT, AND, BY THE
LATE 1970S, ALL BUT A HANDFUL OF
STATES HAD ADOPTED SIMILAR
MEASURES -- SOMETIMES REFERRED
TO AS LITTLE DAVIS-BACON LAWS.
IN THE 1980S, HOWEVER, STATES
BEGAN TO REPEAL THE WAGE
GUIDELINES.
32 STATES STILL HAVE
PREVAILING-WAGE REQUIREMENTS ON
THE BOOKS, BUT THE MEASURES ARE
CURRENTLY UNDER ATTACK IN A
NUMBER OF STATES, INCLUDING
MICHIGAN, WISCONSIN, AND WEST
VIRGINIA.
HERE TO DISCUSS THE REPEAL
DEBATE NOW RAGING IN INDIANA ARE
REPUBLICAN REPRESENTATIVE JERRY
TORR OF CARMEL, THE AUTHOR OF
HOUSE BILL 1019, WHICH WOULD DO
AWAY WITH THE STATE'S COMMON
CONSTRUCTION WAGE.
DEMOCRATIC REPRESENTATIVE DAVID
NIEZGODSKI OF SOUTH BEND,
CO-OWNER OF A THIRD-GENERATION
PLUMBING BUSINESS AND A STAUNCH
SUPPORTER OF ORGANIZED LABOR.
KEVIN BRINEGAR, PRESIDENT AND
CEO OF THE INDIANA CHAMBER OF
COMMERCE, WHICH HAS ADDED HOUSE
BILL 1019 TO ITS LEGISLATIVE
AGENDA.
AND, REPRESENTING THE INDIANA
BUILDING CONTRACTORS ALLIANCE,
JEFF HAGERMAN, CHAIRMAN OF THE
HAGERMAN GROUP, A 107-YEAR-OLD
PRIVATELY OWNED CONSTRUCTION
COMPANY WITH OFFICES IN FISHERS
AND FORT WAYNE.
AND I THANK YOU ALL FOR BEING
HERE.
YOU'RE GOING TO DO MOST OF THE
TALKING BECAUSE MY VOICE IS
GOING TO GIVE OUT AT SOME POINT.
WE'LL START WITH YOU, WHY AFTER
80 YEARS HAS THIS LAW BEEN ON
THE BOOKS?
GOVERNMENT HAS BEEN UNDER
PRESSURE WITH PROPERTY TAX CAPS,
THEY NEED TO SCRAPE FOR EVERY
DIME THEY HAVE.
WE HEARD TESTIMONY IN COMMITTEE
IT'S NOT SAFE R SAVE MONEY BY
ADOPTING A COMMON CONSTRUCTION
WAGE, IT'S NOT THAT THAT MONEY
WILL BE SAVED SO MUCH AS THEY'LL
BE ABLE TO DO MORE PROJECTS
BECAUSE THEY HAVE MORE PROJECTS
CURRENTLY THAN THEY CAN AFFORD
AT MANY LOCAL GOVERNMENTS.
AND THE FIGURE THAT YOU'VE
USED ON NUMEROUS OCCASIONS THIS
SESSION IS 10-20%, IS THAT --
THE EXPERIENCE WE'VE SEEN
WHAT'S HAPPENED, AS YOU
MENTIONED OTHER STATES REPEALED,
TENNESSEE REPEALED A FEW YEARS
AGO, OVER 10 YEARS AGO OHIO
APPEALED ITS PREVAILING WAGE FOR
PUBLIC SCHOOL PROJECTS SO WE'VE
GOT SOME PLACES TO LOOK AND SEE
WHAT THE EXPERIENCE HAS BEEN.
AND THAT'S JUST BEEN THE -- BEEN
THE NORM SOMEWHERE BETWEEN
10-20% JUST BECAUSE OF MORE
COMPETITION, MORE FREE,
OPEN-MARKET BIDDING.
I'M GUESSING WE'RE GOING TO
HAVE A BATTLE OF NUMBERS AND
STATISTICS HERE BECAUSE PEOPLE
WHO ARE OPPOSED TO THIS, DAVID
NIEZGODSKI, ARE SAYING IT COULD
BE A HIT AS MUCH AS FACING
$20 MILLION IN TERMS OF NEGATIVE
IMPACT ON LOCAL COFFERS, THE
VERY PEOPLE, JERRY TORR, THAT
YOU SAY NEED THE EXTRA HELP.
WHICH IS IT?
YES, THANKS.
I THINK IT SHOULD BE A -- IT
COULD BE A BIGGER HIT THAN THAT.
THE WAY IT IS IT EMPLOYS LOWER
CONTRACTORS, LOCAL EMPLOYEES AND
PUTS THEM TO WORK IN LOCAL
COMMUNITIES WHICH HAS THEM SPEND
THEIR DOLLARS IN LOCAL
COMMUNITIES.
IF THAT DOESN'T TAKE PLACE AND
YOU GO SIMPLY FOR THE LOWEST BID
AND YOU DON'T HAVE A PREVAILING
WAGE THAT IS SET IN ACCORDANCE
TO A LOCAL COMMUNITY THEN YOU
HAVE A VERY STRONG CHANCE YOU'LL
HAVE OUT-OF-STATE CONTRACTORS
BIDDING FOR THESE JOBS, IN MANY
CASES WHEN THEY GET THOSE KIND
OF JOBS WHAT YOU START TO SEE
ALSO IS THE MISCLASSIFICATION OF
EMPLOYEES.
SO IF YOU'VE GOT OUT-OF-STATE
CONTRACTORS BRINGING
OUT-OF-STATE EMPLOYEES ON THE
JOB THE CONTRACTORS AREN'T
PAYING TAXES, IN MANY CASES THE
EMPLOYEES ARE GOING TO GO BRACK
HOME AND NOT GOING TO PAY ANY
TAXES, YOU'VE GOT NOTHING THAT'S
GOING TO BE LEFT IN THE LOCAL
COMMUNITY.
PRESUMABLY THEY'LL PAY TAXES
BUT --
PRESUMABLY BUT IN MANY CASES
THAT DOESN'T HAPPEN.
BECAUSE IN MANY CASES THEY DON'T
REALIZE THEY'RE GETTING 1099 AND
AT THE END OF THE YEAR THEY
REALIZE, OH, MY GOSH TAX IS UPON
ME.
IN THE BOTTOM LINE LOSS OF TAX
REVENUE TO THE STATE AND THE
COMMUNITY AND IN THE END WHEN
THEY TALK ABOUT THE ARGUMENT ON
THE OTHER SIDE IT'S GOING TO
BENEFIT TAXPAYERS, I THINK
TAXPAYERS ARE GOING TO BE THE
ONES LEFT HOLDING THE BAG AND
IT'S GOING TO BE EMPTY BAG AT
THE END OF THE DAY.
YOU MENTIONED THE
PREDOMINANCE OF LOCAL
INDIVIDUALS.
96%, IS THAT THE FIGURE YOU'VE
USED?
I'VE SEEN THAT BANDIED ABOUT
CURRENTLY, 90% IN-STATE LABOR.
THAT CAN VARY.
IT'S SOMETHING VERY INTERESTING
YOU CAN TALK ABOUT BECAUSE ON A
LOT OF THESE PROJECTS PEOPLE
WILL ALLOW PROJECT LABOR
AGREEMENTS AND THERE'S BEEN A
LOT OF TALK ABOUT THAT ALSO.
THIS IS AN ASPECT THAT IS VERY,
VERY INTERESTING BECAUSE THAT'S
WHERE IT REALLY TAKES INTO THE
REAL NUTS AND BOLTS, IT'S NOT A
UNION OR NONUNION ISSUE
WHATSOEVER.
ON THESE LABOR AGREEMENTS
WHATEVER AGREEMENT IS STRUCK,
FRICTION THE INDY PROJECTS LIKE
THE ESKENAZI HOSPITAL, LUCAS
OIL, ON THOSE PROJECTS, 40% OF
THE CONTRACTORS ON THOSE JOBS
WERE NONUNION CONTRACTORS AND
THOSE CONTRACTORS ALSO WERE ABLE
TO UTILIZE THEIR OWN WORK
FORCES.
SO YOU -- IT'S AGREEMENT
WHATEVER YOU COME UP WITH TO DO.
THE BOTTOM LINE IS IT IS LOCAL
WAGES THAT ARE PREVAILING AND IN
THAT AREA FOR THE DOLLARS THAT
ARE SPENT ON THOSE PROJECTS.
WELL, ACTUALLY --
ALL RIGHT, GO AHEAD AND THEN
WE'RE GOING TO LET OUR OTHER
GUEST JUMP IN, GO AHEAD.
THERE IS REALLY NOTHING IN
THE CONSTRUCTION WAGE SYSTEM
THAT GUARANTEES OR EVEN BEGINS
TO ENSURE THAT IT'S GOING TO BE
LOCAL LABOR AND IT'S NOT ALWAYS,
THAT DOESN'T HAPPEN.
AND THE CONCERNS ABOUT THE
MISCLASSIFICATION AND ALL OF
THAT, AGAIN, THAT HAS NOT BEEN
THE EXPERIENCE IN THE OTHER
STATES.
THE 90% FIGURE, IS THAT -- DO
YOU BUY THAT, THOUGH?
THAT TO DATE WE GENERALLY SEE
ABOUT 90% OF WORKERS ON THESE
PROJECTS THAT GO THROUGH THE
COMMON WAGE ESTABLISHMENT OF
THOSE -- THOSE WAGE SCALES THAT
THEY ARE, IN FACT, IN-STATE
WORKERS?
I SUSPECT THAT'S PROBABLY
TRUE.
WHEN YOU HAVE A LOT OF PROJECTS
LIKE LUCAS OIL AND ESKENAZI, A
LOT OF THINGS GOING ON, THERE
AREN'T ENOUGH WORKERS AND SO
THEY'RE ALWAYS GOING TO -- WHEN
YOU'VE GOT THAT KIND OF WORK
GOING ON THERE WILL ALWAYS BE
PEOPLE COMING FROM OUT OF STATE
TO WORK ON IT.
KEVIN BRINEGAR, THIS IS PART
OF YOUR ORGANIZATION'S AGENDA
NOW BUT IT WASN'T AS OF A FEW
MONTHS AGO.
THAT'S NOT CORRECT, JON.
WE HAVE POSITION CALLING FOR THE
REPEAL OF THIS LAW.
SINCE YOU WERE BORN,
BEFORE --
AT LEAST --
DIDN'T KNOW IT WAS GOING TO
HAPPEN THIS SESSION, RIGHT?
NO, BUT BECAUSE WE HAVE IT AS
A POSITION, IF AN ISSUE COMES
UP, THEN WE MOVE ON IT.
TO TOUCH ON THE OUT-OF-STATE
WORKER ISSUE, IT'S CURIOUS TO ME
THAT THE CONCERN ABOUT IF WE
HAVE OPEN AND COMPETITIVE
BIDDING RATHER THAN
GOVERNMENT-MANDATED MINIMUM
WAGES TO BE PAID ON PUBLIC
CONSTRUCTION PROJECTS, THAT
OUT-OF-STATE PEOPLE WILL COME
IN, WHEN WE HAD EIGHT TO 10
YEARS AGO THE THREE MASSIVE
PROJECTS HERE IN INDIANAPOLIS,
WE HAD JUST THE OPPOSITE HAPPEN,
WE HAD LUCAS OIL STADIUM, THE
CONVENTION CENTER EXPANSION AND
THE CONSTRUCTION OF THE NEW
INDIANAPOLIS AIRPORT, AND THOSE
WERE ALL SET AT THE UNION WAGE
WITH PROJECT LABOR AGREEMENTS
THAT LIMITED THE ABILITY OF
NONUNION CONTRACTORS TO
PARTICIPATE OTHER THAN ON THE
VERY SMALL PARTS 'CAUSE THERE
WAS A -- I THINK A $250,000
LIMIT, THEY RAN OUT OF UNION
WORKERS, AND INSTEAD OF GOING TO
SKILLED, ABLE-BODY HOOSIERS WHO
COULD HAVE -- WERE HERE AND
COULD HAVE WORKED ON THOSE
PROJECTS THEY BROUGHT IN SOME
4,000 UNION WORKERS FROM
ILLINOIS, OHIO AND KENTUCKY AND
THEY TOOK OUR TAX DOLLARS BACK
TO THEIR STATES AND SPENT THEM.
FOURTH GENERATION OF YOUR
COMPANY'S LEADERSHIP, JEFF
HAGERMAN.
YOU DO THIS EVERY DAY, SOME
PEOPLE MIGHT SAY WHY WOULD HE BE
ON THE SIDE OPPOSING THIS?
BUT YOU'RE WORRIED ABOUT YOUR
WORKFORCE, I PRESUME.
WORKFORCE DEVELOPMENT IS A
BIG THING AND I'M GOING TO TOUCH
ON THAT, I'D LIKE TO COMMENT ON
KEVIN'S FACTS.
THE 4,000, I DON'T KNOW WHERE
THAT NUMBER CAME FROM.
I WAS A PART OF ALL OF THE
PROJECTS THAT KEVIN JUST
MENTIONED, AND THE MAJORITY OF
THE FOLKS ON THOSE PROJECTS WERE
HOOSIERS FOLK.
AND QUITE A FEW, AS DAVID
MENTIONED, IN NONUNION ENTITIES
BECAUSE THEY DO HAVE THE RIGHT
TO BE A PART OF P.L.A. PROJECTS,
SOME CHOSE NOT TO BECAUSE THEY
DECIDED TO FIGHT THAT
ARRANGE: THAT'S A BUSINESS
CHOICE THAT THEY MADE WHICH IS
UP TO THEM.
BUT YOU DON'T BUY THE NOTION
THAT THERE'S A LIMITED SUPPLY
OR --
ABSOLUTELY NOT.
-- OR THERE'S ALMOST A NEED
TO GO OUTSIDE.
THE CHALLENGE WE HAVE, FROM
YOU MY PERSPECTIVE, THE
CHALLENGE WE HAVE MOVING FORWARD
IF THIS LAW GETS REPEALED IS
THAT WE HAVE SET A PRECEDENT
WITHIN THIS STATE.
WE HAVE -- WE ALREADY HAVE, AND
HAVE FOR 10-15 YEARS, STRUGGLED
TO FIND PEOPLE TO JOIN OUR WORK
FORCES AT THE SKILLED LEVEL.
THIS, TO ME, IS NOT A
UNION-NONUNION THING, IT NEVER
HAS BEEN.
I THINK THIS IS GOING TO IMPACT
ALL INDIANA CONTRACTORS
SIGNIFICANTLY, FROM A FEW
STANDPOINTS.
NUMBER ONE, THEY'RE GOING TO --
AGAIN, WE'VE SET A PRECEDENT
WITH RESPECT TO TRAINING AND
DEVELOPING SKILLED LABOR, UNION
SITES WITH THE APPRENTICE
PROGRAM AS WELL AS THE NONUNION
SITES THAT I KNOW COMPANIES THAT
SPEND HUNDREDS OF THOUSANDS OF
DOLLARS TO IMPROVE THEIR SKILLED
WORKFORCE.
$14 MILLION A YEAR IS THE
FIGURE I --
$14 MILLION A YEAR
APPRENTICESHIP AND THOSE PEOPLE
ALSO OBTAIN A TWO-YEAR DEGREE
FROM IVY TECH ONCE THEY
GRADUATE.
SO WE'RE IMPROVING THE LIVES OF
HOOSIERS WHO ARE GOING TO STAY,
WORK, PAY TAXES WITHIN THE
STATE.
DOES THAT PROGRAM DISAPPEAR,
I MEAN, THAT APPRENTICESHIP --
YOU JUST HAD YOUR 10,000th
GRADUATE, I BELIEVE, AT THE
STATEHOUSE RALLY LAST WEEK, DOES
THAT PROGRAM DISAPPEAR?
GO AHEAD.
I WAS GOING TO SAY, I THINK
THAT'S A VERY GOOD POINT BECAUSE
RIGHT NOW WITH THE PREVAILING
WAGES, CONTRACTORS ARE THE ONES
THAT ARE PAYING FOR THE
APPRENTICESHIP PROGRAMS, THEY'RE
PAYING FOR THE EXTRA BENEFITS,
THEY'RE PAYING FOR HEALTH
INSURANCE.
ALL THOSE THINGS ARE COVERED
WITHIN THOSE WAGES.
AND, AS YOU SAID, $42 MILLION ON
AN ANNUAL BASIS ARE PUT INTO
TRAINING PROGRAMS.
THOSE DOLLARS ALL COME FROM
PREVAILING WAGES.
NOW, IF YOU DO AWAY WITH THAT,
AND YOU'RE GOING TO GO SIMPLY TO
WHAT THEY'RE REFERRING AS THE
LOWEST BID JOB THERE'S NO TALK
ABOUT ANYONE THAT'S GOING TO PUT
FORTH ANY DOLLARS FOR TRAINING,
THERE'S NO TALK WHATSOEVER
ABOUT --
THIS IS WHAT I LOVE ABOUT
THIS, AND I KNOW THERE'S BEEN A
LOT OF MENTION ABOUT FREE MARKET
AND WE DO NOT LIVE IN A FREE
MARKET SOCIETY IN INDIANA TODAY.
I MEAN, THE PUBLIC BID LAWS
RESTRICT THE FREE MARKET
OPPORTUNITIES.
I MEAN, IF YOU ARE ABLE TO
PROVIDE A BOND AND YOU ARE ABLE
TO PROVIDE AND FILL OUT THE
PAPERWORK APPROPRIATELY, I DON'T
CARE WHERE YOU ARE IN THIS
COUNTRY, YOU CAN DO WORK IN
INDIANA.
NOW, IF YOU APPEAL THIS LAW --
AND I'VE SEEN IT ACROSS THIS
COUNTRY -- THERE ARE A LOT OF
FIRMS OUT THERE THAT PAY
SIGNIFICANTLY LESS THAN NOT ONLY
THE UNION RATES, BUT THE
NONUNION RATES WITHIN THE STATE.
SO ALL CONSTRUCTION COMPANIES
ARE GOING TO SUFFER WHEN THE OUT
OF STATE INFLUX COMES IN, AND,
AGAIN, AS I MENTIONED BEFORE,
ONE OF THE BIGGEST ISSUES FOR ME
WORKFORCE DEVELOPMENT.
RESPOND TO THAT.
IS WORKFORCE DEVELOPMENT GOING
OUT THE WINDOW?
I MET WITH UNION CONTRACTORS,
JEFF WASN'T THERE BUT SOME OF
HIS BRETHREN LAST FALL AND ASKED
THEM HOW MUCH OF YOUR WORK IS
PRIVATE WORK AND IT VARIED BUT
IT WAS FROM ABOUT 50% TO 85.
AND THEY SAID, WELL, PRIVATE
DOESN'T HAVE TO TAKE THE LOWEST
BID.
BUT LET'S FACE IT BUSINESS
PEOPLE WHO ARE BUILDING
BUILDINGS FOR THEIR BUSINESS ARE
USUALLY PRETTY COST-CONSCIOUS.
EVEN IN INDIANA WHERE -- LIKE IN
HAMILTON COUNTY WHERE THEY
TYPICALLY ADOPT A NONUNION WAGE
WITH THE WAGE PANEL YET THERE'S
STILL UNION CONTRACTORS THAT ARE
ABLE TO WIN THOSE BIDS AND I
THINK THAT WILL CONTINUE AND JON
SOMETHING ELSE I THINK IS
IMPORTANT TO UNDERSTAND THAT
THEY ALSO HAVE THIS -- THE
UNIONS HAVE THIS MARKET RECOVERY
FUND, SOME OF THEM CALL IT.
IT GOES BY DIFFERENT NAMES.
BUT ON PUBLIC PROJECTS, THE
WORKERS PAY -- LAST CONTRACT I
SAW WAS AROUND A QUARTER.
BUT THEY PAY INTO A FUND THAT
THE UNION COLLECTS, AND THEN,
WHEN A UNION CONTRACTOR IS
BIDDING ON A PRIVATE JOB AND IT
HAS STIFF COMPETITION FROM A
NONUNION CONTRACTOR, THE UNION
WILL ALLOW THOSE FUNDS TO BE
USED TO SUBSIDIZE THE BID.
SO YOU LITERALLY HAVE TAXPAYERS
ON PUBLIC PROJECTS SUBSIDIZING
PRIVATE CONSTRUCTION PROJECTS.
ABSOLUTELY NOT TRUE.
THAT'S NOT TRUE.
AND I DEAL WITH MARKET RECOVERY
ON A LOT OF PROJECTS.
THAT'S NOT --
I'VE HAD CONTRACTORS TELL
ME -- BUT YOU DON'T UNDERSTAND
THE CONCEPT, I DON'T THINK.
THOSE DOLLARS ARE DOLLARS THAT
ARE GIVEN BY THOSE EMPLOYEES.
AND THOSE EMPLOYEES -- IN A LOT
OF CASES THEY WEREN'T MAKING
PREVAILING WAGES AT THE TIME.
IT MAY HAVE BEEN ON ANY OTHER
HOST OF JOBS THEY MADE, IT'S OFF
THEIR SALARY, THOSE EMPLOYEES
HAVE SAID, YOU KNOW WHAT, WE'RE
GOING TO CONTRIBUTE A LITTLE BIT
AND WE'RE GOING TO PUT BACK INTO
THE SYSTEM.
IT'S GOT NOTHING TO DO WITH
OTHER TAXPAYERS' DOLLARS WHICH I
THINK RAISES A REALLY GOOD POINT
HERE.
WHEN YOU TALK ABOUT THINGS --
USE UNION -- OR PRIVATE
PROJECTS, RIGHT?
ON ANY PROJECTS WHATSOEVER IN
A PERSON'S WAGE THAT DOESN'T
MEAN THEY'RE ALWAYS GETTING
PREVAILING WAGES, IF THEY'RE
GETTING NORMAL WAGES AND THEY
DECIDE THAT OUT OF MY HOURLY
TAKEIN I WANT TO PUT A QUARTER
OF EVERY HOUR INTO THAT TO HELP
FUND OUR WHOLE SYSTEM THAT'S NOT
A WAY TO OUTBID OR OUTCLASS
ANOTHER BIDDER.
THAT'S NOT WHAT THAT'S ABOUT.
WHAT I DO WANT TO RAISE HERE,
THOUGH, WHEN YOU TALK ABOUT YOU
DON'T THINK IT'S GOING TO HURT
WHAT I THINK IS GOING TO HAPPEN
ULTIMATELY BECAUSE IF YOU --
HOPEFULLY YOU WON'T DISAGREE,
NONPARTISAN ARM, LEGISLATIVE
SERVICES, HAS EVEN SAID RIGHT
NOW IF YOU'RE GOING TO BID THESE
PROJECTS IT'S GOING TO BE REALLY
HARD TO GET THE WINNING BID
UNLESS YOU LOWER WAGES.
LOWERING WAGES IS THE ONE TRUE
WAY YOU'RE GOING TO GET THE
LOWERING OF SAVINGS AND IF YOU
DO THAT YOU'RE GOING TO BRING IN
LESS TAX DOLLARS IN THE STATE OF
INDIANA.
AND L.S.A. EVEN SUGGESTED IF
THAT HAPPENS THAT THERE WILL BE
LESS TAX REVENUE COMING INTO THE
STATE OF INDIANA.
WHAT HAPPENS IN THAT CASE?
WHERE DO WE GO?
NOT ME.
BUT YOU WOULD AGREE THERE
ARE --
WHERE DO THOSE DOLLARS COME
FROM, THEY COME FROM TAX
DOLLARS, THESE ARE PUBLICLY
FUNDED PROJECTS.
EVERY DOLLAR SPENT ABOVE MARKET
PRICE IS A -- THE DOLLAR, THE
TAX DOLLAR THAT ANOTHER BUSINESS
DOESN'T HAVE TO PAY THEIR PEOPLE
SALARIED BENEFITS, HEALTHCARE.
BUT WHAT IF IT DOES GO OUT OF
STATE AND IF THE WORKFORCE COMES
IN, THEN IT DOESN'T --
I SPENT 12 YEARS ON THE
NOBLESVILLE SCHOOL BOARD AND
DURING THAT TIME I WAS THE
OWNERS' REPRESENTATIVE ON THE
COMMON CONSTRUCTION WAGE
HEARING.
IT WAS A RAPIDLY GROWING SCHOOL
DISTRICT.
WE DID A LOT OF PROJECTS DURING
THAT TIME.
AND WE CHOSE TO SET THE MINIMUM
TO BE PAID AT THE ABC RATE SO
THAT WE WOULD HAVE MORE FAIR,
OPEN AND COMPETITIVE BIDDING.
AND DURING THOSE 12 YEARS
LITERALLY HALF OF THE PROJECTS
WERE WON BY UNION CONTRACTORS,
THE OTHER HALF BY NONUNION
CONTRACTORS, AND MANY TIMES THE
WINNING BIDDER WAS PAYING WAGES,
AT LEAST FOR SOME OF THE
CATEGORIES, THAT WAS HIGHER THAN
THE MINIMUM THAT HAD BEEN
ESTABLISHED THROUGH THE
WAGE-SETTING PROCESS.
THE OTHER THING WE TALK ABOUT
WHAT -- THE COMMON WAGE LIKE
IT'S SOME MAGICAL THING.
EARLIER THIS YEAR ALLEN COUNTY
AND FORT WAYNE COMMUNITY SCHOOLS
HAD WAGE-SETTING HEARINGS OR
PROJECTS THEY WERE DOING ON THE
EXACT SAME DAY.
ALLEN COUNTY CHOSE THE ABC
RATES, FORT WAYNE COMMUNITY
SCHOOLS CHOSE THE FLCIO RATES,
FOR ELECTRICIANS IT WAS 56% FOR
UNSKILLED MILLWRIGHTS IT WAS
106%.
SO WHICH ONE IS REALLY THE
COMMON WAGE.
STATE STATUTE.
YOU'VE GOT FIVE DIFFERENT --
OF COURSE IT WAS
DETERMINED -- FROM MY EXPERIENCE
THAT THE COMMON WAGE IS WHATEVER
THE COMMITTEE SAYS IT IS, AND
THAT'S BEEN BACKED UP, AND WHAT
GETS ESTABLISHED IS TOTALLY
BASED ON WHO'S APPOINTED TO THAT
COMMITTEE.
AND OUR ONLY POSITION, IF I CAN
FINISH, IS THAT WE DON'T SET
MINIMUM PRICES TO BE PAID ON
CONSTRUCTION MATERIALS, ON BUS
DRIVER SALARIES, ON COMPUTERS,
OR EVEN PAPER CLIPS.
SO WHY DO WE DO IT ON
CONSTRUCTION LABOR?
AND WE'RE ALL FOR THE TRAINING
PROGRAM.
WE RECOGNIZE THE TRAINING AND
THESE ARE OUTSTANDING PROGRAMS.
I'VE GONE TO VISIT THEM.
BUT THE QUESTION IS HOW SHOULD
THEY BE PAID FOR.
AND ARE YOU SUGGESTING THAT
MAYBE THEY SHOULDN'T BE PAID FOR
BY OVERCHARGING TAXPAYERS ON
PUBLIC CONSTRUCTION PROJECTS,
BUT WE OUGHT TO DEAL WITH IT
STRAIGHT UP AND --
BACK INTO THE LOCAL
COMMUNITIES AND SUPPORT THOSE
LOCAL COMMUNITIES, THOSE ARE NOT
TAXABLE --
BUT WOULD THOSE TAX DOLLARS
BE BETTER SPENT BY LEAVING THEM
IN THE TAXPAYERS' POCKETS RATHER
THAN HAVING THEM PAY
ABOVE-MARKET PRICES FOR THE
PUBLIC CONSTRUCTION PROJECTS.
ECONOMY GROW BY HAVING A
FLOOR SHOWING OF THE DOLLARS
WITHIN THE ECONOMIES AND WHEN
THE ECONOMIES --
IN MY OPINION, I THINK WE'RE
SKEWING, WE'RE SKEWING THESE
DOLLARS.
I MEAN, WE'RE SKEWING THE
PERCENTAGES.
I THINK THESE STUDIES THAT HAVE
BEEN THROWN UP ARE INCLUSIVE,
THEY'VE ALL BEEN PROVEN TO BE
INCLUSIVE IN OTHER STATES.
IF YOU BID IN THESE OTHER STATES
NOBODY'S LOOKING AT THE TRUE
LIFE CYCLE COSTS OF THESE
BUILDINGS WHEN YOU HAVE LOWER
SKILLED PEOPLE BUILDING THESE
BUILDINGS AND YOU WILL HAVE
THAT.
IN OHIO THE QUALITY WENT UP.
THEY DID A SURVEY FIVE YEARS
AFTER THEIR REPEAL AND THERE WAS
A SLIGHT INCREASE IN THE
QUALITY.
ARE THERE OTHER STATISTICS
WORKPLACE MISHAPS GO UP AS WELL?
SAFETY ISSUE.
ONE LAST THING I'M SAYING, I
KNOW WE'RE TIGHT ON TIME HERE.
HOW ARE WE GOING TO RECRUIT
PEOPLE INTO -- INDIANA,
HOOSIERS, HOW ARE WE GOING TO
RECRUIT THEM TO JOIN OUR
WORKFORCE AND HELP US BUILD
THOSE BUILDINGS.
WE'RE HAVING A TOUGH ENOUGH TIME
NOW, I KNOW THAT.
OFFER THEM A DECENT WAGE FOR
A HARD DAY'S WORK.
WELL, BUT SOMETHING LIKE 88%
OF ALL OF THE CONSTRUCTION
WORKERS IN INDIANA ARE NOT UNION
AND SO SOMEHOW THEY'RE GETTING
RECRUITED.
WE'LL ALL COME BACK HERE AND
SEE WHO WAS RIGHT AND LINE UP
YOUR STATISTICS AND YOURS AND
WE'LL SEE WHO WAS RIGHT AND WHO
WAS WRONG.
OBVIOUSLY, IT'S AN IMPORTANT
ISSUE, ONE ABOUT WHICH MANY
PEOPLE VERY STRONGLY AND I THANK
YOU ALL FOR BEING HERE TO SHARE
THE INSIGHT THAT YOU ALL HAVE ON
THIS ISSUE IN THE FINAL WEEKS
HERE OF THE SESSION PROMISES TO
BE INTERESTING.
AGAIN, MY GUESTS HAVE BEEN
REPUBLICAN REPRESENTATIVE JERRY
TORR OF CARMEL.
DEMOCRATIC REPRESENTATIVE DAVID
NIEZGODSKI OF SOUTH BEND.
KEVIN BRINEGAR, PRESIDENT AND
CEO OF THE INDIANA CHAMBER OF
COMMERCE.
AND JEFF HAGERMAN, CHAIRMAN OF
THE HAGERMAN GROUP CONSTRUCTION
COMPANY.
THE SUBJECT IS SCHOOL
FUNDING.
SHOULD THE MONEY FOLLOW THE
STUDENT OR FOLLOW THE NEED?
WE'LL TAKE A COURSE ON THE
EDUCATION BUDGET ON THE NEXT
"INDIANA LAWMAKERS."
TIME NOW FOR OUR WEEKLY
DISCUSSION WITH ED FEIGENBAUM,
PUBLISHER OF THE NEWSLETTER
"INDIANA LEGISLATIVE INSIGHT."
ED, WHY NOW AFTER THE 80
YEARS.
WE'RE DOING ALL THE 80 YEAR
THINGS THIS YEAR, MUST BE A
CIRCADIAN CYCLE, THE SUNDAY
ALCOHOL SALES, THE RIVERBOAT
LAWS AFTER A COUPLE OF DECADES
OF EXPERIENCE.
IT SEEMS LIKE ALL OF A SUDDEN
WE'RE LOOKING AT THINGS THAT WE
HAVEN'T REASSESSED IN QUITE A
BIT AND THIS IS ONE OF THEM.
AS TO THE SPECIFIC TIMING, I
DON'T THINK ANYBODY REALLY KNOWS
WHY --
DO YOU THINK IT'S MORE OF
JUST A REASSESSMENT OR DO YOU
THINK IT'S THE FACT THAT PEOPLE
LOOK AT THE SUPER MAJORITY IN
BOTH THE HOUSE AND SENATE AND
SAY IF WE WANT TO GET THIS DONE
THIS IS THE TIME, OR IS IT A
MATTER OF PURE POLITICS OR
NUMBERS?
THIS COULD SOON DONE THIS AS
WELL IN THE PAST, THEY COULD
HAVE WRAPPED IT UP IN A NICE
PACKAGE WITH A NICE RED BOW BUT
THEY DIDN'T.
IN FACT, THIS YEAR YOU SAW IN
THE HOUSE IN PARTICULAR A NUMBER
OF REPUBLICANS WHO FELT
COMPELLED TO VOTE WITH THEIR
DISTRICTS, PARTICULARLY UP IN
LAKE COUNTY, NORTHWEST INDIANA.
AND THEY VOTED --
13 OF THEM, RIGHT, THAT SPLIT
WITH THEIR PARTY.
A GREAT NUMBER.
SO IT'S NOT NECESSARILY THE
SUPER MAJORITY BECAUSE A LOT OF
THE NEWER REPUBLICANS, THE NEW
REPUBLICANS FROM LAKE COUNTY,
DIDN'T SUPPORT THE MAJORITY OF
THE CAUCUS ON THIS PARTICULAR
ISSUE.
HOW DID THIS END UP, THIS
SESSION?
I THINK WHAT YOU MAY WANT TO
DO IS TAKE A LOOK AT THE BILL
THAT WAS ORIGINALLY INTRODUCED
IN THE HOUSE BY REPRESENTATIVE
DAVE OB ERIN ADIDN'T GET A
HEARING AND SET THE PROJECTS
THAT WOULD COME UNDER
JURISDICTION OF THE COMMON
CONSTRUCTION WAGE BILL, THESE
AGREEMENTS.
AND RIGHT NOW YOU'VE GOT
PROJECTS THAT ARE 350,000 OR
OVER THAT ARE SUBJECT TO THE
LAW.
AND I THINK MAYBE YOU'LL SEE
THAT BUMPED UP A LITTLE BIT MORE
TO THE OVER LAY LIMITS OF
$1 MILLION AND PEOPLE WILL BE
HAPPY ABOUT THE RESULT THERE AND
WILLING TO COMPROMISE AT THIS
LEVEL.
YOU THINK THIS WILL END UP IN
COMPROMISE EVEN THOUGH THE
NUMBERS ARE THERE TO GET THIS
DONE APPARENTLY?
ABSOLUTELY, ABSOLUTELY.
IT LOOKS LIKE WE'RE AVOIDING A
SUMMER STUDY THAT SOME PEOPLE
WANTED AND OTHERS DIDN'T AND IT
LOOKS LIKE WE WILL END UP WITH
SOMETHING BUT WITH A MUCH HIGHER
LEVEL THAN WE'VE GOT TODAY AND I
THINK PEOPLE ON BOTH SIDES WILL
WALK AWAY RELATIVELY SATISFIED.
AND POLITICAL FALLOUT, DOES
THIS MOBILIZE ORGANIZED LABOR?
WELL, I THINK CERTAINLY, TO
THE EXTENT THAT THEY WANT TO
MOBILIZE THEIR MEMBERS THEY'LL
BE ABLE TO USE THIS AS SOMETHING
TO GET THEM GOING BUT I DON'T
THINK IT'S GOING TO BE A REAL
CATALYST STATE-WIDE AND IT'S
CERTAINLY NOT GOING TO BE
SOMETHING THAT'S GOING TO HURT
THE REPUBLICANS IN GENERAL
EITHER.
VERY GOOD, ED.
AS ALWAYS, APPRECIATE YOUR
INSIGHT.
FOR MORE INFORMATION, EPISODE
STREAMS, AND EXTRA CONTENT,
VISIT US ON THE NET AT
WFYI.ORG/LAWMAKERS.
YOU CAN ACCESS LIVE STREAMING
COVERAGE OF THE GENERAL ASSEMBLY
ON THE INTERNET AS WELL.
AND, REMEMBER, YOU CAN GET OUR
SHOW ON DEMAND FROM XFINITY
AND BRIGHTHOUSE NETWORKS.
WELL, THAT CONCLUDES ANOTHER
EDITION OF "INDIANA LAWMAKERS."
I'M JON SCHWANTES, AND, ON
BEHALF OF WFYI PUBLIC MEDIA AND
INDIANA'S OTHER PUBLIC-
BROADCASTING STATIONS, I THANK
YOU FOR JOINING US.
AND I INVITE YOU TO VISIT
WFYI.ORG FOR EXCLUSIVE WEB
CONTENT, INCLUDING THE BEST
ADVICE OUR GUESTS HAVE EVER
RECEIVED.