New Jersey's 23rd Legislative District

Senator Michael Doherty

Senator Mike Doherty

Editorial: We Must Make N.J. Affordable or More People Will Leave, Lawmaker Says

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The following editorial by Senator Mike Doherty was published by NJ.com on November 8, 2019:

Elected public officials have a responsibility to deliver essential public services at the lowest possible cost to taxpayers. Too often, however, we see officials at all levels of government resigned to the notion that New Jersey will always be a high-cost place. They accept as fact that it’s impossible to fix our roads or build new schools without levying the highest taxes in the nation.

In this NJ.com editorial, Sen. Mike Doherty says lawmakers must demonstrate the same initiative in trying to cut excessive taxes that our former residents have shown in trying to escape them. (©iStock.com)

To that point, Governor Murphy seems content to promote New Jersey as a “good value for money,” rather than make an actual effort to cut costs. He recently told business leaders that if taxes are a primary concern, New Jersey is “probably not your state.”

That’s a mind-boggling statement considering New Jersey leads the nation in the out-migration of residents, according to a study conducted by United Van Lines. People are listening to the defeatist attitudes of leaders like Murphy and are lining up to leave.

And it’s not just retirees who are packing their bags. Increasingly, families and small business owners are demonstrating their belief that they can find good schools, safe neighborhoods, and economic opportunity alongside lower taxes and a substantially reduced cost of living outside of the Garden State.

Given these trends, New Jersey must take real steps to improve affordability. Lawmakers must demonstrate the same initiative in trying to cut excessive taxes that our former residents have shown in trying to escape them.

First and foremost, New Jersey’s leaders need to stop being myopic and look beyond the revenue side of the ledger. There needs to be a real focus on what we’re spending.

I made that point a few years ago during the gas tax debate when everyone was fixated on how many billions to raise and what size gas tax increase that required. Barely anyone, however, demonstrated any real concern about alarming studies showing New Jersey’s roads to be the nation’s most expensive to build, operate, and maintain.

That’s why I introduced legislation (S-175) to create the “State Transportation Cost Analysis Task Force” to determine what factors drive our road construction costs and to what extent.

The Legislature, inexplicably, has failed to take even this first step that would help us to understand the problem and begin to develop a plan to achieve savings.

As a result, nothing has changed. In the Reason Foundation’s recently released 24th Annual Highway Report, New Jersey again ranked dead last in cost-effectiveness, spending double what New York spends per lane-mile.

Absent the completion of the transportation cost analysis that I proposed, it’s impossible to know exactly why we pay so much for our roads.

Anecdotally, however, many of the state and local leaders I have spoken with point to prevailing wage mandates as a key escalator of costs for all manner of construction projects undertaken by government entities in New Jersey.

On federal projects, studies have shown that the prevailing wage drives up the cost of labor by 22%. Similarly, the prevailing wage in Illinois is thought to be 37% higher than average market wages.

Those higher labor costs have driven half-a-dozen states to repeal their prevailing wage laws since 2015, including Michigan, Wisconsin, Arkansas, Indiana, Kentucky, and West Virginia. In total, 24 states now allow market wages to be paid on government projects.

When Michigan repealed its prevailing wage law last year, hundreds of millions in annual savings were projected. Here in New Jersey, it’s hard to believe there wouldn’t be substantial savings if projects could pay labor at market rates.

Where I live in Warren County, for example, the prevailing wage dictated by the New Jersey Department of Labor and Workforce Development for a drywall finisher is an astounding $68/hour. For a carpenter, it’s $79/hour. For a painter, it’s $69/hour. Those mandated wages certainly seem excessive.

Interestingly, nobody has made any effort to quantify the impact of the state’s prevailing wage law on the cost of government in New Jersey, despite conventional wisdom suggesting it adds 20% to project costs. It could be much higher, we just don’t know.

To help get a handle on the impact of the prevailing wage on government spending in the Garden State, I recently introduced legislation (S-4181) to create the “New Jersey Prevailing Wage Law Study Commission.”

Like the State Transportation Cost Analysis Task Force, the proposed commission would provide lawmakers with important research and analysis that could be the basis for future reforms.

While Democrats in Trenton are likely to resist efforts to shine a light on these issues, our bipartisan action would signal to overwhelmed taxpayers that lawmakers haven’t given up the fight to achieve an affordable New Jersey.

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