The Nevada System of Higher Education just performed a magic trick. It made $18.5 million disappear into thin air, and no one is looking for it.
A top priority for Assembly Democrats is imposing prevailing wage requirements on school construction projects. Schools currently can pay 90 percent of the prevailing wage, but Assembly Bill 136 would make them pay the full amount. The bill would also require Nevada governments to pay prevailing wage on all construction projects that cost more than $100,000. The current floor is $250,000. The Nevada Policy Research Institute has found that prevailing wage rates in Nevada are 56 percent higher than market wage rates.
As part of the legislative process, government agencies submit fiscal notes on bills. This tells lawmakers — and the public — how much proposals will cost state and local governments. This information is highly valuable. Something that’s a good idea at $5 million could be a very bad idea at $500 million.
The fiscal notes tell a clear story. Hiking prevailing wage requirements will increase costs. The Clark County School District estimates AB136 will cost it $15 million every two years. The Department of Administration said the bill would increase costs by 15 percent on projects between $100,000 and $250,000. Carson City officials wrote the bill would hike expenses by $200,000 on projects such as playgrounds and ensuring safe routes to school. If the Legislature passed this bill, they wrote, “We won’t be able to do as many projects.”
Democrats would rather pay off their union cronies than allow local governments to pay for additional education projects.
That leads to the curious case of the Nevada System of Higher Education, which originally said the bill would cost it $18.5 million this biennium. But system officials withdrew their fiscal note in testimony before the Assembly Ways and Means Committee.
“The challenge with trying to forecast a fiscal note is you are also trying to forecast what the market will be doing for the next two years and beyond,” Andrew Clinger, NSHE’s chief financial officer, wrote in an email. “After reviewing our initial estimates, we changed the fiscal note to unable to determine.”
That’s bureaucrat speak for “The Democrats who control the Legislature can do a lot more than $18.5 million in damage to our budget. It made political sense to pull this fiscal note.”
The prevailing wage is politics at its worst. Politicians use the power of government to increase costs specifically to benefit politically connected unions. Those unions, in term, donate heavily to the same politicians. Disguising the true cost of this policy only makes it worse.