By DIRK VANDERHART/Oregon Public Broadcasting
SALEM — The most controversial policy being debated in Salem these days has nothing to do with the thousands of bills that have been introduced in the brand new legislative session.
It’s an executive order issued by Gov. Tina Kotek late last year – one that offers a leg up to her labor union allies who seek work on billions of dollars of state-run construction projects.
In recent days, Republicans have blasted Kotek’s Dec. 18 order more than any piece of policy being proposed by legislative Democrats this year.
“For crying out loud to drop that thing right before Christmas and then let people go on vacation,” Senate Minority Leader Daniel Bonham, R-The Dalles, said earlier this month. “I’ve got contractors in my district saying, ‘Are you kidding me? What does this mean?’”
“When the governor announced her executive order,” added House Minority Leader Christine Drazan, R-Canby, “she was, to me, declaring that there was zero commitment on the Democrat side of the aisle to ever control costs.”
The state’s largest newspaper also unloaded on Kotek. A Jan. 12 editorial in The Oregonian/OregonLive called on her to reverse an order it described as a “Christmas gift” to unions at citizens’ expense.
“This is one gift she should take back,” the editorial concluded.
Kotek, meanwhile, has argued her order amounts to a win-win, ensuring the state can complete big projects efficiently and on budget while also bolstering apprenticeship programs that help train workers in building trades like electricians, roofers and bricklayers.
“It’s in the best interest of the state for stewarding the resources to get a big project done,” she said last week. “We just have a philosophical disagreement about it.”
Kotek’s order stands out both in its substance and timing.
It’s far more sweeping than most executive orders she’s signed since taking office, many of which declared drought or fire emergencies. And it arrives as Oregon lawmakers begin meeting in earnest to pass a multi-billion dollar package that will include projects impacted by the order.
So what’s all this about?
With the order, Kotek made it Oregon policy to use a tool called a “project labor agreement” on state construction projects where labor makes up at least 15% of the total cost.
These agreements, often called PLAs, are deals hammered out between project owners – like the state – and labor unions at the earliest stages of a project. They lay out the working conditions for the entire project, including provisions on pay and benefits. There’s often a guarantee there will be no strikes by unions or lockouts by employers. Some deals include requirements to use a target number of apprentices or to work with minority-owned businesses.
PLAs date back nearly a century, to intensely complex projects like Washington’s Grand Coulee Dam or California’s Shasta Dam.
Even critics of Kotek’s order concede the deals have their place, but they bristle at government mandates.
That’s because under the agreements, unions representing plumbers, heavy equipment operators, carpenters and other trades are almost certain to supply the labor for a given project. Opponents say that puts so-called “open shop” contractors that don’t typically employ a unionized workforce at a distinct disadvantage.
“What they tend to do is buy you certainty and labor peace,” said Mike Salsgiver, executive director of the Oregon chapter of Associated General Contractors, which opposes the executive order. “We have absolutely no problems with that as long as they are agreed to by the customer and by the contractor.”
Kotek’s order, Salsgiver said, is “government putting its hand on the scale.” More than 70% of his group’s 750 members, largely made up of small firms, are non-union.
Labor groups, unsurprisingly, have cheered Kotek’s order, saying it will lead to better-built projects completed with minimal disruption.
PLAs have been a political football on the national level for decades.
Republican presidents tend to agree with opponents, who say the deals reduce competition for available jobs by discouraging non-union contractors from vying for the work. They say that leads to higher overall costs. Both Presidents George W. Bush and Donald Trump issued executive orders blocking them on federal projects.
Meanwhile, Democratic Presidents Barack Obama and Joe Biden issued orders that were friendly to the deals – including a sweeping decree by Biden that they be used on federal projects over $35 million. Proponents say PLAs cut back on labor strife and make the timelines of complex projects more predictable.
“For large complex construction projects, particularly in the transportation arena, there should be a project labor agreement,” Kotek told reporters last week. “I don’t believe it’s going to blow a big hole in the budget because the folks who are saying that can’t show me the numbers.”
In fact, it’s not hard to find research to back up both sides.
Opponents point to studies that suggest, for instance, that the use of PLAs increased the cost of new schools in Massachusetts by around 14%, or affordable housing in California by 21%.
But there is also scholarship that rebuts those findings, suggesting they are overly simplistic and ignore the fact that projects using PLAs are often more complex, and therefore more expensive. One peer-reviewed paper from 2020 concluded PLAs didn’t hike the costs of community colleges in California. A more recent study suggested the same for port projects in Seattle.
“It’s a big country and you can find anecdotes for anything,” said Gordon Lafer, a professor at the union-friendly Labor Education & Research Center at the University of Oregon. “But what the big studies show is that it does not raise costs and it, in more cases than not, brings the projects in on a shorter timetable.”
In Oregon, the fight over agreements like PLAs has begun to rage.
Labor groups have pushed to require the deals for publicly funded projects, but lawmakers haven’t agreed. A 2023 bill that would have expanded use of PLAs died after a single public hearing in which unions cheered the idea and many public agencies opposed it.
“In rural areas we already have issues getting contractors to bid, especially on larger projects,” the Association of Oregon Counties wrote in testimony on the bill. “This would just add unneeded complexity and would prevent many local contractors from bidding.”
Last year, the Associated General Contractors sued the Oregon Department of Transportation after the state inked an agreement requiring union labor on several highway and bridge projects. That deal was put on ice by a Marion County judge, who found the arrangement put nonunion construction firms at a disadvantage. The matter is currently before the Oregon Supreme Court.
Critics of PLAs say their increased use will mean fewer contractors willing to bid on state work. While firms building public projects in Oregon must pay a prevailing wage, opponents like Salsgiver say less competition means higher prices.
“Most of the open shops I’m hearing from are saying they won’t bid for these projects,” he said.
By way of example, Salsgiver and others point to a state-funded project to expand and realign a key interchange in Newberg. That job was subject to a state-ordered PLA, and received just a single bidder for the work – at a $46 million construction price tag that was 22% higher than the state’s estimate.
And while many Democratic politicians are friendly to the PLAs, that’s not universal. Last year, California Gov. Gavin Newsom vetoed a bill that would have required the agreements on a handful of state projects. His complaint: They would hike costs.
“While I am generally supportive of PLAs as an option for public works projects,” Newsom wrote in a veto letter, “the new requirements proposed in this bill could result in additional cost pressures that were not accounted for in this year’s budget.”
On the federal level, PLAs might once again be on their way out. Opponents are already lobbying Trump to once again bar them in federal projects as part of the flurry of executive orders he’s issuing early in his second term.
But in Oregon, the deals might see unprecedented use under Kotek’s order. Lawmakers are planning to pursue a multi-billion-dollar transportation funding package this year that is virtually certain to include money for projects that would be subject to PLAs.
The governor said last week she’s been consistent on this subject – even insisting on a project labor agreement for an ongoing Capitol renovation project. That exceedingly complex seismic retrofit of the aging building has run $100 million over budget estimates and seen a completion date pushed farther and farther back.
“No one should be surprised,” Kotek said of her order.
The Associated General Contractors and other critics, meanwhile, are considering their next move.
“There is precedent for executive orders to be overturned,” said Salsgiver. “We’re looking at all options.”
- This story originally appeared Jan. 24, 2025 on Oregon Public Broadcasting.
It sounds like a well researched and thought out plan. It also sounds like old rhetoric from Republican naysayers.