On behalf of the New Jersey Business & Industry Association, the nation’s largest statewide business association whose members employ over one million people in New Jersey, I am testifying in opposition to Senate Bill No. 3414 (Sweeney & Greenstein) and ask that it not be released from committee.
While we recognize the potential benefits of expanding certain benefits in public works contracts to disadvantaged communities, we oppose the expansion of project labor agreements (PLA) to more types of projects, such as pumping stations, sewage treatment plants, and road projects. Local governments are under considerable economic strain given the current pandemic. They have been forced to expend considerable dollars on COVID-19 prevention and related measures at the same time when tax dollars are declining due to the substantial loss of businesses in their communities.
PLAs, while intended to streamline processes, have in fact resulted in increased costs and project delays. These are part of the findings of the Department of Labor’s only report on the use of PLAs from 2010. Increased costs of course mean increased property taxes. Just this week a report was published showing that property taxes continue to rise, with the average residential bill being over $9,000 for the first time. Property taxes are a substantial cost of doing business in New Jersey, this is especially so for small businesses.
I will also note that similar changes to the definition of public works projects were contained in Senate Bill No. 1370. That bill was conditionally vetoed by Governor Murphy because he believed the expansion of PLAs to road projects was not warranted. Given this action by the Governor, this expansion of PLAs should be reconsidered.
We urge this committee not to release this bill today. Thank you for your consideration.