During Gov. Steve Beshear’s first round of the Frankfort Follies, legislators basically ignored him.

So he’s been traveling the state trying to ensure that he becomes more relevant before the 2009 General Assembly convenes.

The problem: He sounds more and more like his one-term predecessor, Ernie Fletcher. The former governor made similar hops throughout the state during his bid for re-election while sounding a refrain similar to Beshear’s: “State government needs more of your hard-earned dollars. We in Frankfort know how to spend your money better than you do.”

What if just one time a Kentucky governor said: “Folks, we don’t have a revenue problem. Rather, quite honestly, we have to get control of our spending.” Why, paramedics would have to rush to town halls to treat victims of ensuing heart attacks and strokes.

Instead, this governor’s more interested in raising taxes and expanding gambling — safe projects that won’t anger his political base.

“We need to continue looking for more revenue,” Beshear said several times during a recent town hall meeting in Bowling Green, reported the Daily News. He uttered not one word about spending cuts.

So, I offer a way Beshear could get his hands on millions without raising taxes or expanding gambling – sorry substitutes for real economic development. Here it is: Lead an effort to lower construction costs on public projects by eliminating prevailing-wage requirements.

This isn’t a new idea. For years, budget officials, economic experts and even public-school administrators have pounded away at Kentucky’s prevailing-wage formula. This antiquated policy results in construction workers on public projects being paid a lot more money at taxpayers’ expense than they would doing the same job on a private project.

• The state budget office in 2006 projected that prevailing-wage rates on new schools, university buildings and regional technology centers alone are 18 percent to 30 percent more than the current average for the same type of labor on non-public projects.

• A recent report by Paul Kersey, Bluegrass Institute adjunct scholar and national labor expert, showed that “depending on the community, Kentucky’s prevailing wages were on average anywhere from 28 (percent) to 33 percent higher than those found by the (Bureau of Labor Statistics).”

• The state budget office projected prevailing-wage requirements would drive up the cost of 21 primarily university-building projects by $39 million alone, including $20 million for the new University of Kentucky hospital.

Most amounts were lower than that, but some represented a huge chunk of labor costs. For example, the cost of labor to renovate Northern Kentucky University’s old science building is 21-percent higher because of prevailing wage. The project would cost only $12.1 million without prevailing-wage requirements. With it, taxpayers get hit for $15 million.

• The state budget office also reported that prevailing-wage mandates are driving up labor costs on public projects by more than 20 percent in 42 Kentucky counties and by at least 17 percent in 87 of the commonwealth’s 120 counties.

Now, Beshear avoids this topic like kids duck spinach, and for the same reason. It’s “green,” as in cash. You see, much of his support comes from labor unions, and prevailing-wage rules serve the unions.

But the union numbers have shrunk. Only 25 percent of non-residential construction workers are now unionized, yet prevailing-wage rates equal union labor rates in more than 60 percent of Kentucky’s communities.

Labor bosses don’t like my idea. But I remind the governor: You were elected to serve all the people, not just a shrinking minority — no matter how much its members pump into your political campaigns.

If Beshear is serious about finding new revenue, my idea isn’t new, but it serves all taxpayers. And it won’t cost a single dime.



Jim Waters is the director of policy and communications for the Bluegrass Institute, Kentucky’s free-market think tank. You can reach him at jwaters@bipps.org. You can read previously published columns at bipps.org.