Reduce Costs Before Raising Tolls: It Is Time To Reform “Prevailing Wage”

By Art Gallagher

Perhaps lost in the news of the S & P down grade of United States Treasury debt is the local news that the Port Authority of NY/NJ is calling for a massive toll and fare increases to fund capital projects.  Tolls on Hudson River crossings would increase from $8 to $12 and fares on the PATH trains would increase from $1.75 to $2.75.

Governors Christie and Cuomo issued a joint statement that signals that toll increases are coming, but at lower rate than proposed by the Port Authority Board.  We’ve seen this dance before.  Port Authority proposes a huge increase and the politicians scale it back.

Mark Magyar has a comprehensive article at NJSpotLight highlighting the “need” for the $1 billion revenue increase that Port Authority is requesting.

Governors Christie and Cuomo have established themselves as credible reformers in reducing the size of state government.  The proposal is another opportunity for them to improve government services and implement lasting reforms in the process.

Christie should use this opportunity to reform a major cost driver on public capital projects; “prevailing wage.”

“Prevailing wage” requires wages paid to employees of contractors working on government projects in New Jersey to be paid at a “union rate” determined by the unions and the Department of Labor, even if the winning bidders of the contractors are not union shops.

Eliminating the “prevailing wage” clause in government contracts would save taxpayers billions of dollars on construction projects.  There is a huge over supply of labor available.  Wages on government contracts should be set my market forces, not by unions who are making political contributions.  

The savings associated with eliminating this practice would go well beyond the Port Authority projects.  It would extend to DOT projects and county and municipal projects.  The saving to toll payers, fare payers and property tax payers would be substantial.

Another area for savings is the largess of salaries paid to the political patrons who run the Port Authority.  Just as Christie has mandates that school superintendents shall not earn more than the Governor, employees of the Port Authority should not earn more than the governors of New York and New Jersey.

Posted: August 8th, 2011 | Author: | Filed under: Andrew Cuomo, Chris Christie, Port Authority | Tags: , , , , | 5 Comments »

5 Comments on “Reduce Costs Before Raising Tolls: It Is Time To Reform “Prevailing Wage””

  1. TheDigger said at 11:25 am on August 8th, 2011:

    If the “prevailing wage” blackmail fomented by the unions were done away with, there might be two benefits:

    1. cost of government projects could go down.

    2. more workers might be hired and in this economy (which is a “depression”, not a “recession” in the construction trades) would be a boost to economic activity.

    Perhaps if we told liberals that employing more people brought in more tax revenues and lessened the need for government handouts (food stamps, unemployment) they might go for it.

  2. A toll is a tax said at 2:03 pm on August 8th, 2011:

    Aren’t toll increase tax increases? So much for Christie’s promises not to raise taxes.

  3. TheDigger said at 5:47 pm on August 8th, 2011:

    Technically, a toll is a user fee – don’t use it, you don’t pay for it ….a tax would make everyone pay for it, regardless of usage.

  4. Middletown Conservative said at 12:41 am on August 9th, 2011:

    As I understand it, if federal dollars are involved in any project – and in most cases, they are when it comes to infrastructure and roads, prevailing wages apply. It would need to be overturned at the federal level. Even at the state level, the unions own most of the politicians – D’s as well as R’s.

  5. A toll increase is a tax increase said at 7:45 am on August 9th, 2011:

    Is that how they will spin it, Digger? What’s next? If you don’t like income taxes, don’t earn so much. If you don’t like the sales tax, don’t spend as much. If you employ someone in NJ and you don’t like New Jersey’s higher unemployment taxes, lay-off some employees. If you don’t like property taxes, sleep on Art Gallagher’s couch. Is that how it works?

    Many New Jersey families will have less because Chris Christie will approve these toll increases. Many New Jersey businesses will find it even more expensive to do business in this state because of these toll increases. New Jersey becomes a more expensive, more miserable place to be because Chris Christie and New Jersey can’t stop looking for new ways to take more money from New Jersey’s overburdened taxpayers (or “user-fee” payers) .

    This one is for you, Digger …

    The Taxman by Stevie Ray Vaughan