Opinion: Union scheme to skim road funds is a dead end

Keith Ledbetter

Is it fair to force Michigan road builders to contribute up to an additional $28 per hour into fringe benefit funds, and then not be able to access those benefits for themselves and their families? Most would think this ridiculous.

Is it fair to force Michigan taxpayers to divert from road funding as much as an additional $28 per worker per hour — millions of dollars per year — to prop up a troubled private union fund that will yield literally zero benefits for road workers and won’t pave a single mile of road? Of course not.

Construction signs

Fortunately, the Michigan House of Representatives passed a state budget that is standing up for Michigan’s skilled tradespeople and taxpayers fed up with our crumbling infrastructure by stipulating that any company that engages in such an unscrupulous shakedown of workers and taxpayers cannot do business with the State.  

The legislative action is needed because while Lansing prepares to invest billions more to fix the damn roads, an extreme and previously nonexistent subcontracting provision was signed onto by certain road builders and the Operating Engineers 324 Union.

This provision forces non-union Michigan companies and workers (who already comply with Federal Davis Bacon prevailing wage rules) to not only pay into the health, retirement and other benefit offerings for their own company plans, but also pay into the fringe benefit funds of their competitors. This results in companies and employees who are not affiliated with a union having to pay into the coffers of union fringe benefit funds that only union members may access. The workers actually doing the work are being ripped off and won’t receive any benefit. What’s more, taxpayers could be on the hook for the extra expense, diverting big dollars away from road construction and into the union’s coffers.

Not surprisingly, the scheme to skim millions in road funding dollars has sent shockwaves throughout the road building community in Michigan since being made public this spring. It’s wrong, plain and simple. 

If companies are unwilling to pass the costs on to taxpayers or to take a big chunk out of their employees’ paychecks, the scheme would likely even prevent some local Michigan workers and companies from participating on road projects funded by their own tax dollars.  

For those who do endeavor to fix the roads, the doubling of fringe benefit costs could cause the price of bids to skyrocket beyond what other bidders submit, preventing them from being awarded road projects. Adding insult to injury, many companies and their employees may just stop bidding the work, shrinking the pool of qualified companies and workers able to fix our roads and causing the skilled worker shortage to worsen.

Without a legislative fix, this scheme means big bucks are neither going towards employee benefits, nor fixing the roads. Michigan has never had to deal with this troubling practice before, and it needs to end right away before more harm is done. 

That’s why Michigan lawmakers should be commended for passing a budget that draws a line in the sand to ensure road funding dollars fund road repairs. That’s also why Gov. Gretchen Whitmer should stand with them in the fight. The message the Legislature is sending for public road projects is clear: Don’t force people to pay for benefits they don’t receive, and don’t send taxpayers the bill. 

Keith Ledbetter is the president and CEO of Associated Builders and Contractors of Southeastern Michigan representing commercial and industrial contractors.  He was formerly vice president of the Michigan Infrastructure and Transportation Association.