Connecticut taxpayers overpaid by many millions of dollars for public school construction between 2001 and 2019 because of so-called project labor agreements that restrict fair and open competition.
"The presence of a PLA increases the final base construction costs of a school by $89.33 per square foot (in 2019 prices) relative to non-PLA projects. Because the average cost per square foot of construction is $450.15, PLAs raise the final construction cost of building schools by 19.84 percent," according to a new report from The Beacon Hill Institute for Public Policy Research. (The Effects of Project Labor Agreements on School Construction in Connecticut, by Burke and Tuerk, January 2020.)
PLAs restrict projects to union-only labor, and as a result, the vast majority of construction workers who are non-union are blocked from working, and their merit shop employers do not bid. This limits competition, which increases prices.
- If the $2.031 billion in school projects built under PLAs had been bid and built using fair and open competition, taxpayers would have saved $503.463 million.
- The savings per project is estimated at $9.681 million.
- PLA price effect persists even when cost data is subdivided and mid-sized projects, large projects, middle schools and high schools are grouped and analyzed separately.
Read more at the Yankee Institute.
Read the report.