SACRAMENTO, CA - Last Tuesday, California voters passed Proposition 1D, approving $10.4 billion in bonds for school construction projects. The money will fund facilities from the elementary to university level to relieve overcrowding and repair older schools. Total state costs are estimated at $20.3 billion, including principal and interest.

State officials should use this money effectively, so that schools reap the greatest benefit. One way to accomplish that goal is to prevent school districts from entering into project labor agreements, or PLAs. PLAs exclude open shops with non-union workers from bidding on the project, require workers to be hired from union halls, and require contractors to pay union wages and obey union regulations.

The Associated Builders and Contractors of America strongly oppose PLAs because they "exclude open shop contractors from bidding on projects paid for by their own tax dollars'' and because they "drive up the cost of construction by reducing competition for the work.'' Examples from across the country confirm that introducing PLAs into school construction projects drives up the cost.

A 2004 Beacon Hill study showed that PLAs increased the costs of school construction projects in Connecticut by $30 per square foot relative to non-PLA projects. A 2006 study by the same group showed increased costs of $27 per square foot in New York for PLA projects.

In September of this year, taxpayers saved considerable sums when a PLA was defeated in Fall River, Massachusetts. The original round of bidding under the PLA produced a low figure of $22.5 million. When the PLA was removed and open competition was introduced the low bid was $19.5 million, a full $3 million less than the PLA bid.

California has seen its share of money wasted on PLAs as well. In 2000, Oakland voters approved Measure A, a $300-million bond to fund school rehabilitation. In 2004 one school in East Oakland, with students housed in portable classrooms, used some of the bond money for repairs. The initial low estimate under open competition came it at $1.8 million from a San Rafael firm that specialized in school construction. At the last minute, however, the school district announced that it had signed a labor pact with Alameda County's trade unions.

The San Rafael company was not a union company, and lost the job. Bidding reopened, and after only three offers, the job was awarded to a Contra Costa company for $2.2 million. The decision to enter into a PLA in this case cost taxpayers $437,000, money that could have gone to other restoration or construction projects in a school district with sore need for such improvements. The unions won out, but not the students.

Despite the clear benefits of open competition and the obvious discrimination that occurs due to PLAs, California
school districts continue to enter into these agreements. In September of this year, for example, the San Francisco Unified School District signed an agreement with the San Francisco Building and Construction Trades Council for some construction projects using funds from the same Measure A bonds that the Oakland school district misused two years ago.

Proposition 1D provides more funds for school construction. Educators statewide should not make the same mistake Bay Area schools did with Measure A money. Rather than entering into PLAs that inflate costs, reduce competition, and discriminate against non-union workers, California school districts should strive to stretch their new $8 billion in bond dollars as far as possible.

The best way is to prevent PLAs from absorbing bond money that could otherwise be distributed to more schools and more classrooms where it will help those Proposition 1D was meant to help -- the kids.

Rachel Chaney is an education policy fellow at the Pacific Research Institute. She can be reached via email at
rchaney@pacificresearch.org.