Another old Pennsylvania law enters the state's fiscal follies
A 104-year-old state law is stirring controversy over state efficiency.
Pennsylvania has lots of old laws.
Take the 1933 liquor monopoly. Or its 1936 "temporary" (yet still in place) 18 percent Johnstown Flood Tax.
You're likely aware of ongoing efforts to bust the monopoly to get our slouching-toward-insolvency state more money.
Well, here comes another old-timer: the Separations Act of 1913.
It's one more controversial thing Pennsylvania does -- because it always has -- that might not make much sense anymore.
It mandates that public construction projects of $4,000 or more (and, yes, that number's the same for 104 years now) have separate contracts for plumbing, electrical and such, instead of just one contract.
Know how many other states do that? Two: New York and North Dakota.
Know how many private-sector jobs run that way? Apparently none.
So there's an argument that many contracts instead of one means inefficiency, delays, litigation and cost overruns on state, municipal and school construction.
Pittsburgh attorney David Scotti, a nationally recognized construction law expert, says there's "no doubt" that the law drives up cost: "If this was economically smart, you'd see the private sector doing it."
Industry insiders estimate that public construction spending here is about $2 billion annually and suggest that the law adds at least 10 percent to costs, a lot of money.
But that's disputed.
The Pennsylvania State Building & Construction Trades Council (AFL-CIO) supports the law. Its president, Frank Sirianni, says it saves money because separate contracts reflect actual costs without general contractors' mark-ups.
Wayne Miller, president of the Philadelphia Building Trades, "absolutely" agrees.
And the trades say bid comparisons on some pricey projects back in 2008 show multi-contract bids lower than single-contract bids.
So it's contentious. Many labor unions like the law. Many contractors don't.
And as Pennsylvania flops on the deck of fiscal shipwreck, with no money, huge debt, searching for savings everywhere, this complex issue is surfacing.
State General Services Secretary Curt Topper, testifying at a Senate Appropriations Committee hearing in February, said this about the law:
"We face some significant constraints that the private sector does not face when it comes to managing our money efficiently … the Separations Act requires that we do business less efficiently than we could otherwise … it is much more difficult to design a project, to bid a project, and to manage a project. So, I'd love to see us address that problem."
So Gov. Wolf's pick to run the agency that builds all non-highway state projects says the act "requires" inefficiency.
That set off activity.
Jon O'Brien, head of the General Contractors Association of Pennsylvania, representing about 600 construction companies, immediately penned an op-ed piece for Wolf's hometown York Dispatch, calling for repeal of the Separations Act.
Maybe Wolf saw it.
O'Brien got called to the governor's office to meet with staff. He says he was told that due to labor reaction to Topper's statement, the administration needs to rethink the issue.
But Wolf spokesman J.J. Abbott says that's not true; the meeting was to get input, just like from unions, and he added, the administration is "not offering changes [to the law] at this time."
So Topper went rogue? Wolf likes what trade unions like? Or what?
Topper's spokesman says, "He's really not doing interviews on that."
Cue the GOP legislature.
Senate State Government Committee Chairman Mike Folmer (R., Lebanon) is offering a bill to repeal the act. He thinks Topper "had to back off … [but] I'm trying to make government more efficient and join the 21st century."
Rep. Garth Everett (R., Lycoming) plans a House bill. He calls the law unnecessary: "Things are a little different in Pennsylvania since 1913."
And there's a pending Senate resolution to study "costs and efficiencies" of public construction laws.
So what we have here is a century-old statute with disputed impact that, at a minimum, needs a thorough review. Let's hope it doesn't take another 104 years.