Fiscal Crisis in NM? Let’s Raise Construction Prices!

Legislation now moving through the New Mexico Legislature (it has already passed the Senate and will be heard in the House Labor Committee tomorrow). The legislation will expand so-called “prevailing wage” (read inflated wage) laws.
The simple truth is that this bill will increase costs to NMDOT projects by as much as 50% compared to the federal Davis-Bacon wage scales and thus reducing the amount of resources that NMDOT has to do what it is supposed to do ie. building roads, bridges, and other infrastructure. The State’s own fiscal impact report of SB 33 reinforces the expenses associated with this wage inflation proposal to be $135.4 million over the next three fiscal years.
Clearly, with the stimulus package now in place and state and local governments ready to build those “shovel-ready projects,” big labor is gearing up to expand its piece of the pie. Unfortunately, overpaying for labor means that taxpayers get less bang for their buck.