Nobody doubts for an instant that rebuilding the New Jersey coastline in the wake of Hurricane Sandy will be costly. But a little over two weeks ago Republican Governor Chris Christie (in photo) took a step that should make it a good deal less so. On April 15, Christie vetoed a union-backed bill passed this winter by the legislature to expand the range of state-contracted construction requiring Project Labor Agreement (PLAs). Such agreements, drawn up between state/local governments and unions, require contractors to pay union-scale wages and benefits on large-scale public works projects. Unions love them because they effectively remove nonunion companies from competitive bidding. The general public doesn’t make out as well. Various studies have shown that PLAs raise labor costs, often dramatically so, and with little or no evidence of better workmanship. In applying his veto pen, the governor, if belatedly, has fulfilled a 2009 campaign promise.
Union Corruption Update this March provided a lengthy analysis of the New Jersey PLA battleground. Six months ago, near the end of last October, Hurricane Sandy slammed into the upper portion of the Middle Atlantic coast with lethal force. It was one the most devastating storms in recent American history, rivaling that of Hurricane Katrina in 2005. Directly or indirectly, Sandy took nearly 160 lives, not even including those in the Caribbean, where the storm originated. In New Jersey alone, the hurricane and related flooding destroyed or damaged an estimated 72,000 homes, businesses, motor vehicles and other properties. Entire beach communities in Ocean and Monmouth Counties looked like the set of a post-apocalypse movie. Some two million residential and nonresidential electric customers temporarily were left without power. On November 23, Gov. Christie’s office issued its conservative estimate of statewide property damage: $29.4 billion.
In response, Congress in January rushed through and President Obama signed a $50.7 billion emergency relief package for affected states. This sum was in addition to $9.7 billion already authorized by lawmakers to pay off flood insurance claims. The portion going to New Jersey could be a boon to construction trade unions. President Barack Obama, reversing his predecessor George W. Bush, in February 2009 issued Executive Order 13502, which “encouraged” the use of Project Labor Agreements on a case-by-case basis on projects of at least $25 million. The State of New Jersey, back in 2002, already had enacted a law allowing public agencies, including boards of education, to enter into PLAs with unions on public works projects whose total cost, exclusive of land acquisition, is at least $5 million. Unions and their political allies, however, are only partially satisfied with the law because it covers only certain structures. It excludes pumping stations, and water and sewage treatment plants. And it exempts highways and bridges as well.
The aftermath of Hurricane Sandy provided an opportunity for state lawmakers and allies in organized labor to rectify what they saw as a deficiency. New Jersey Senate President Stephen Sweeney, D-Gloucester County, and colleague Donald Norcross, D-Camden County, sponsored a bill (S.2425) to amend the law to include highways, bridges, pumping stations, and water/sewage treatment plants as PLA-eligible. They argued the measure would get the state quickly back on track and give first hiring priority to state residents. Sweeney and Norcross had more than a passing interest in securing passage. Sweeney is a paid organizer for the Iron Workers union, while Norcross serves as president of the Southern New Jersey Labor Council. The Senate passed S.2425 by 23-13 in January; the next month the State Assembly followed suit by a 47-26 margin, with three absences/abstentions. The measure was now on Gov. Christie’s desk.
Most observers had been expecting a veto. As a candidate for governor in 2009, in fact, Christie had made known his opposition to Project Labor Agreements. He wrote on his campaign website: “I will eliminate special interest union giveaways that increase spending and taxes by ending the use of project labor agreements, which drive up the cost of public construction projects and fail to deliver a public benefit at a time when the economy is shedding jobs and taxpayers are struggling to make ends meet.” An October 2010 report on school construction costs issued by the New Jersey Department of Labor and Workforce Development affirmed Christie’s view. It concluded that PLA projects active in Fiscal 2008 cost about 30 percent more per square foot than non-PLA projects and also took longer to build. Still, Christie is a political figure up for re-election. And he didn’t explicitly announce his intention to veto the measure when it was passed. As the weeks wore on and no action seemed imminent, a veto was becoming less certain.
In the end, the governor issued a veto. A PLA law expansion, he argued, would have slowed the rebuilding process. He explained in an official statement:
As has been well-chronicled, Hurricane Sandy was the worst storm to strike New Jersey in one one-hundred years, causing unprecedented damage and devastation throughout the State. Today, millions of New Jerseyans impacted by Sandy continue to rebuild their lives, and their communities. In many instances, this rebuilding process involves the construction and redevelopment of critical infrastructure, including roads, highways, bridges, tunnels, water supply facilities, and sewage treatment plants. Many of these projects would be subject to the provisions of this bill.
Because this bill would significantly alter public contracting in this State at a time when the swift reconstruction, rebuilding and redevelopment of public infrastructure is a priority, I must return this bill without any approval pursuant to Article V, Section I, Paragraph 14 of the New Jersey Constitution.
Senate President Sweeney, by contrast, wasn’t happy. He stated: “The governor’s veto is disappointing because it would have meant work for thousands of New Jersey residents. At a time when the unemployment rate in New Jersey is among the highest in the country, this was really a commonsense measure that would have created jobs right here.”
Union leaders in the state have displayed mixed reactions. Bill Mullen, president of the AFL-CIO-affiliated New Jersey Building and Trades Council, couldn’t be reached for comment. Greg Lalavee, business manager for Operating Engineers Local 825 in Northern New Jersey, which had endorsed Christie for re-election only the week before, stated, “We had an idea of where the governor was going to be on that particular bill but for a whole bunch of reasons, we took a neutral position as it went through the Legislature anyway.” But the New Jersey Regional Council of Carpenters announced it would not support Christie’s re-election, based largely on his veto. “The Governor’s veto is a disappointment that signals his ignorance of what we stand for,” wrote Council Executive Secretary Michael Capelli in a letter to members.
Supporters of worker liberty are applauding Christie’s action. Americans for Prosperity, an Arlington, Va.-based nonprofit group with chapters nationwide, stated: “Not only has Gov. Christie protected New Jersey taxpayers from higher taxes and higher costs on future State-funded construction projects, but he has thwarted Big Labor’s shameless attempt to raid Hurricane Sandy relief aid dollars and bilk federal taxpayers who are subsidizing the $60 billion reconstruction effort.” Ben Brubeck, a spokesman for TheTruthAboutPLAs.com, a project of American Builders and Contractors, an association of open shop contractors, also based in Arlington, Va., likewise lauded the action. “TheTruthAboutPLAs.com and the merit shop contracting community thank Gov. Christie for the veto,” he wrote. “PLA mandates on Sandy reconstruction would limit opportunities for 75 percent of New Jersey’s private construction workforce to rebuild their own communities because they are not unionized.”
The legislature now is faced with the decision of whether to override the veto. In New Jersey, as with Congress, this would require a two-thirds majority in each house. The Senate and Assembly each voted convincingly for passage of S.2425 yet fell just short of that benchmark. No lawmaker thus far has indicated a move to override. In the meantime, post-storm reconstruction proceeds, however deliberately. One hopes New Jersey will be spared future calamities on the order of Hurricane Sandy.