Written by Jim Waters president and CEO of the Bluegrass Institute for Public Policy Solutions.
This year marks the 50th anniversary of Secretariat’s breathtaking dash to Triple Crown lore in which this exceptional creature set – and still holds – records for the fastest runs in all three of the crown’s legs – the Kentucky Derby, Preakness and Belmont Stakes.
It’s remarkable considering Secretariat actually came from behind in both of the first two races, including breaking from the back of the pack at the Derby and then being the last to exit the starting gate in the Preakness.
States can come from behind, too.
Kentucky in recent years has been starting to make its move to become as economically competitive as we were back in Secretariat’s day.
Repealing the mandate that prevailing wage rates be paid on public projects is proving to be an important policy reform toward making that comeback a reality.
Prevailing wages became synonymous with union wage rates since being established by the federal government in its Davis Bacon Act in 1931 and by many state governments since that time.
The goal was to discourage non-unionized contractors from bidding on public projects. Thus, it became the prevailing union wage rate.
Being required to pay these higher wages significantly drives up the cost of schools, roads and courthouses for taxpayers compared to construction projects in the private sector.
The evidence suggests Kentucky made an important move by ridding itself of the prevailing-wage scourge six years ago.
A new report being released next week by Michigan’s Mackinac Center for Public Policy on the impact of prevailing wage mandates on road construction and repair estimates Kentucky has cut the cost of building, paving and maintaining new roads by between $4,500 and $7,000 per mile.
The Bluegrass State has saved “considerable money in highway construction and maintenance” by eliminating prevailing wage mandates, said report author Michael Hicks, Ph.D., director of Ball State University’s Center for Business and Economic Research.
Repealing this nonsensical and costly policy represents more “responsible management of scarce resources,” added Michael D. LaFaive, Senior Director of the Mackinac Center’s Morey Fiscal Policy Initiative.
What seems obviously irresponsible is for Michigan to undo its prevailing wage-repeal law after passing it five years ago.
In fact, one of the reasons the Mackinac Center is releasing this report is to help taxpayers and voters in its Great Lakes State understand just how much more this promised move made by the political left in March will cost them – as much as an additional $9,000 per mile of road construction and maintenance.
It’s like Michigan is stepping aside, allowing Kentucky and other benchmark states to begin making their move.
The Associated Builders and Contractors Merit Shop Scorecard in December ranked Kentucky seventh, and leading our surrounding – and most of our competitor – states due to scoring high in, among other categories, implementing right-to-work protections and repealing prevailing wage mandates in 2017.
Back in the days surrounding Secretariat’s feats, Kentucky was running with the rest of the pack.
However, when our commonwealth began favoring higher taxes, more government and expanded welfare policies, we fell behind – way behind – those states favoring less government, lower and less-punitive taxes and more economic freedom in general.
Falling behind doesn’t have to be the end of the story, though, especially when, like Secretariat, you know you have the muscle to make your move.
Kentucky is beginning to do so in some policy areas like those favoring labor and economic freedom while continuing to be left way behind when it comes to educational freedom.
Still, like Secretariat, if Kentucky finally decides it’s going to make its move, it can turn out to be a great story, too.