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May 27, 2010 11:38 AM CDT

Association update: Economic recovery? Contractors not cheering yet

by Robert Heise, president of the Minnesota Chapter of Associated Builders and Contractors Guest Commentary

We hear a lot about the economy recovering, but it is becoming more difficult to hear any cheering from construction firms.

Despite the fact that construction companies are an important catalyst for creating jobs and economic recovery, those in the industry face a dizzying array of obstacles, including burdensome regulations, difficulties with financing and excessively high tax rates.

Early last year, President Obama announced a series of steps taken by the Small Business Administration and the U.S. Treasury Department to help unfreeze the credit markets. While the program helped big banks and lending institutions get back on their feet, it did little for the small and medium-sized banks that business owners depend on for loans.

Meanwhile, federal regulators cracked down on banks that made too many bad loans. In response, banks have shied away from issuing loans to small businesses, even those with a solid credit history. Tighter lending standards have left business owners unable to access the credit they need to grow or finance routine operations.

That leaves our construction contractors with few options. Since many are unable to get traditional bank loans because of the tight credit market, they are forced to rely on securing home equity loans, personal loans, auto title loans and even credit cards to raise working capital.

And as if that wasn’t bad enough, the current tax code disproportionately affects small businesses, which are forced to expend significant time and resources in order to comply with the complex and burdensome rules. In fact, the current tax code impedes growth by discouraging long-term investment due to high capital gains taxes and hinders further job creation with an over reliance on payroll taxes.

Association update: Builders Have Concerns About Health Care Reform
by Robert Heise, Associated Builders and Contractors, Minnesota chapter, Guest Commentary

In a recent poll of members of the Associated Builders and Contractors — a national association with 79 chapters representing 25,000 merit shop construction and construction-related firms with 2 million employees — health care reform was ranked as their primary concern for the 111th Congress. However, as details of these health care proposals emerge, we are finally beginning to see what some elected officials in Washington mean when they say they want to “even the playing field” in a hurried attempt to provide health insurance to all Americans.

What is being proposed by some in Congress does nothing to address ongoing health care concerns for the vast majority of the American populace. Instead the proposals will dramatically increase an already bloated national debt, place billions of dollars in new taxes on the American people and their
businesses and put health care decisions into the hands of untrained Washington bureaucrats.

One such proposal to “even the playing field” is to enact a government-run public insurance option, a plan that will decimate the private market for health insurance. The idea is for the federal government to use their unfair advantage over private competitors that would result in less competition and less choice. A study by the Lewin Group found that two out of every three people will lose their current health insurance coverage, including more
than 114 million people who receive health benefits through their employer or another provider.

While health care reform is important, our focus must be on ensuring that each of us have the freedom to choose what health care best suits our needs, and make certain that federal governmental intrusion and inefficiency into the insurance market is kept to a minimum. But, the current proposals seek to accomplish the exact opposite. Do those in Congress honestly believe that putting our health care decisions into the hands of federal government officials will even the playing field?

Instead of the free choice that we currently enjoy, some want to appoint a new Health Care Commissioner, and give him or her unprecedented authority to determine what “acceptable” health care coverage is, and set all the rules for what health care coverage must include and what treatments patients could receive and at what cost. This forced choice runs counter to the freedoms we have today.

The health care proposals in Congress fail to provide people with health care solutions that are practical or affordable. Health care is best administered on free-market principles and support meaningful reforms that make quality health care more affordable and accessible to all people.

Association update: Ideas For Jump-starting The Construction Business
by Robert Heise Guest Commentary

The nation’s construction industry is in the tank. With building in this country nearly at a standstill and the industry unemployment rate at a staggering 24.7 percent — more than twice the national average — contractors are struggling to stay in business.

The faltering economy, along with federal legislative and regulatory anti-business proposals, has created much uncertainty in the construction industry and have made it difficult for firms to adequately plan for the future. Currently, employers are unwilling to hire additional employees or invest in equipment or facilities.

Associated Builders and Contractors has developed a wide-ranging package of recommendations that will help to stimulate the construction industry and put Americans back to work. The proposal includes measures to:

•Increase access to financial capital for new construction projects; provide meaningful tax relief to construction contractors, families and individuals.

•Enact a national comprehensive energy plan which includes the construction of new, and upgrades to, oil refineries, electric power plants and other traditional and alternative energy infrastructure.

•Allow the entire construction industry workforce to participate on federally funded or federally assisted projects.

•Support construction training programs that will attract new workers into the industry.

Time is running out for the thousands of construction contractors and their employees who have not seen a paycheck in months. Congress and the president have an obligation to all Americans to act responsibly and move forward with initiatives that will revive the economy and create jobs for the men and women in the U.S. construction industry.

Association update: Backroom Deal Could Hurt Construction
by Robert Heise, Minnesota Associated Builders and Contractors, Guest Commentary

An eleventh-hour backroom deal in the U.S. Senate is sending shock waves through America’s construction industry, and could cost thousands of jobs.

The Senate health care reform bill passed last month exempts small businesses with fewer than 50 employees from government-imposed mandates requiring that employers provide health insurance to workers or face a hefty penalty.

But, Sen. Jeff Merkley, D-Ore., managed to slip five paragraphs into the legislation that would require construction contractors with at least five full-time employees and more than $250,000 in annual payroll to provide workers with health insurance benefits. If they didn’t, and if any of their employees received federally subsidized health insurance coverage, contractors would have to pay a penalty of $750 for each full-time worker.

Merkley’s provision was never offered as an amendment to the health care legislation, which would have given senators an opportunity to debate the measure. He must have known that once senators read the language they would realize that it unfairly targets small-business employers in the construction industry and would ultimately result in more job loss.

During these difficult economic times, having a new federal government mandate on construction contractors is not the answer to getting people back to work. With construction in this country nearly at a standstill and the industry unemployment rate at 22.7 percent – more than twice the national average – contractors are struggling to stay in business. The health care mandate would only add to their misery.

Union Data Reports

The U.S. DOL has a website that can search current union activity. You can search by a specific local union and by state. For example, you can enter the IBEW and select Minnesota. You can examine assets and liabilities along with total members. Other reports can be downloaded specific to payer/payee
on the LM-2s. Go to this link for more information: http://erds.dol-esa.gov/query/getOrgQry.do

Health Care bill should open up competition, not choke it out.
North Dakota Marketing Manager, Chris Deitch, offers his opinion on December 12, 2009 edition of ND's The Forum. Click here to read.

CONSTRUCTION BACKLOG INDICATOR

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