Right-to-work, sprinkler mandates, unemployment compensation are key issues

State Rep. Ron Miller (R-York) is the newly appointed chairman of the House Labor and Industry Committee, which figures prominently in several upcoming legislative battles.

Among the issues expected to come before the committee during the new session are potential challenges to the state’s new sprinkler system mandate for residential construction and an effort to make Pennsylvania a right-to-work state. Pennsylvania also owes the federal government more than $3 billion, plus interest, in unemployment compensation debt, a growing concern for the state’s business leaders.

Earlier this week, Mr. Miller sat down with PA Independent to discuss those issues, the cost of economic development spending and the expected union push-back as Pennsylvania looks to tighten its purse strings in the coming year.

There will be several major issues in front of your committee in the coming year, including a challenge to the state’s uniform construction code. As of Jan. 1, the construction code mandates the use of sprinkler systems in all new residential construction, but builders say that will add thousands to the cost of homes and will further hurt the housing industry. Are you going to address that issue early this year?

We saw a large uptick in building permits being pulled before the first of the year. Pennsylvanians told us they really don’t like the sprinklers in individual residences. It’s going to be a little while until we know for sure whether the new requirement is going to as big of negative impact as we expect.

Without knowing for sure, people are going to wait on the sidelines to see what the legislature is going to do, so we need to address this issue. Spring is coming and its time to start digging foundations and if people are going to build houses, they have to know what it is going to take.

We need to provide some certainty to Pennsylvanians; whether they are potential new home buyers or contractors.

Should the sprinkler mandate be repealed?

Personally, I will vote to repeal it, mainly because it is an added cost. I have met over the past two weeks with various groups, including people who originate mortgage loans. That added cost is increasing the amount of down payment a potential home buyer has to put down. If their loan-to-value is 90 percent or 95 percent and you add in $2,500 or $20,000 for the sprinkler system, it certainly increases the down payment they have to make. So it is going to have a negative impact on the housing market in this fragile economy.

Most times, housing leads us out of a recession. We probably need to rescind [the mandate], even understanding that some people may want sprinklers and that is certainly their option.

The groups who favor the sprinkler mandate say the systems can save lives and they compare this to mandating smoke detectors in homes and air bags in cars – both of which faced resistance at first because of the cost.

There is a major difference. A malfunctioning smoke detector might be dangerous for the homeowner, but the added cost for a smoke detector is not anywhere near what these sprinkler systems are. And there is much controversy over sprinkler systems and how much more do they really improve safety above what the mandatory smoke detectors have done.

And the second part of the discussions is: what happens when there is a discharge or a leaking pipe? Does the homeowner’s insurance cover it? So those issues are related, but smoke detectors were a much simpler issue than the sprinkler systems.

Do you have timetable for when this will come to the committee?

Not right now, but there are bills being drafted and co-sponsor memos are out.

Another major labor issue could be the establishment of right-to-work laws in Pennsylvania. Lt. Gov. Cawley said during the campaign he would support such a move. Is there a real possibility that Pennsylvania moves towards being a right-to-work state in the next year?

What we need to be looking at is the Pennsylvania economy, what gets the economy moving and what is fairest to the Pennsylvania taxpayer. We can’t throw safety out the window, but if that is our focus, right-to-work has to be a part of the discussion.

Last year, in York County, the planning commission and the economic development corporation got together and held meetings around the county to look at business in the county and what is important for the various regions to help promote the economic development of the region and improve the economy.

At one of the meeting, Darrell Auterson [president of the York County Economic Development Corporation] said he gets calls from companies looking to locate in Pennsylvania – specifically in York County – and he is asked whether or not Pennsylvania is a right-to-work state. He has to say ‘no’ and he sees a negative impact with that answer.

So becoming a right-to-work state would help draw companies in from other states?

It’s not just drawing companies in but keeping them here. You know Ben Franklin’s famous quote about ‘a penny saved is a penny earned?’ Well, a job saved is a job created in many ways. We have been competing not only with other countries but with other states within our county. Businesses look to see where it is most advantageous to locate.

We’ve tried an awful lot of things with giving state money to help incentivize businesses to come here and stay here. In the end, we have a pretty dismal track record with that. We have companies that have been here 10 years and then left. Would a better business climate in Pennsylvania not better serve the Pennsylvania taxpayer?

The last administration – and certainly administrations before that – made a habit of giving major companies large handouts to locate in Pennsylvania. Did that help improve the business climate?

When the economy was not in as bad a shape as it is now, that was actually an easier solution. If you had some money, it was easier to give a company some money to come here or to stay. That was easier than the tough issues that need to be tackled as far as what drives the business climate in Pennsylvania: the tax issues, the right to work, project labor agreements on public projects. Those are difficult issues to address.

Fact is, we don’t have the money. The easy answer isn’t there anymore. We have the history that says it really didn’t work all that well and now we don’t have the money anyway, so we have to improve the business climate.

Pennsylvania’s unemployment compensation debt is now at $3 billion and as of January we had to start paying interest on that debt. What is the solution? Do we have to bite the bullet and pay it back? Do we go to Congress and ask for an extension?

I think you need to do a combination of those. We can certainly ask Congress to extend it, but I have to admit that if I was Congress I’d be reluctant to do that because even the federal government has seen that they have created a nightmare with too much borrowing and too much spending. It’s going to have to be paid back sometime and it’s having a negative impact on our economy.

There are other things we can do. Is there a way to restructure that debt somehow through the private sector that could save Pennsylvanians money? We need to look at that. We need to see the interest rate the federal government is charging. And we need to be very aware of the impact on our business community.

What about state laws which mandate Project Labor Agreements for many public projects? Are they going to be reviewed?

There is certainly going to be legislation introduced to address that, and you might have noted that Lancaster County just prohibited PLAs in Lancaster County. It might be interesting to see what other counties follow along.

The public doesn’t understand why you would use their taxpayer dollars and forbid open bidding. Why are we doing that? What is the benefit to the taxpaying public? It’s unnecessary.

Last question. Pennsylvania has a long history of labor unions having big influence in government. Most of these things we’ve talked about are not looked upon favorably by the unions, so it’s safe to say there is going to be some resistance. Are you and the rest of the Republicans prepared for that?

These things aren’t necessarily anti-labor. The labor movement did a great service to Pennsylvanians over the years, certainly helped with some work place safety rules long before OSHA was in place and helped with salaries and benefits long before we had minimum wage requirements and government guidelines.

The question is: what is their intent now? And is it fair to expect the vast majority of Pennsylvania taxpayers, who don’t benefit by the labor movement rules now, to pay for it? Can the Pennsylvania taxpayers afford to pay for it? That’s what it’s going to come down to.