2015 Michigan Merit

www.abcmi.com WINTER 2015 1

WINTER 2015 PUbLicaTioN oF aSSociaTED bUiLDERS aND coNTRacToRS oF micHiGaN

JOINT VENTURESOFFER OPPORTUNITY, REQUIRE COUNSEL

Also:

Michigan’s Prevailing Wage Lawis 50 Years Old: Time for Repeal

Recent History Offers Economic Insight

2 WINTER 2015 micHiGaN mERiT

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Photo taken by Trumpie Photography


inside

VoLUmE iX, iSSUE 128 Government Affairs TheMichiganSupremeCourtWillHear

ABC’sAppealonLansingPrevailingWage

AmbushRuleMovesForward;EmployersShouldSeekLegalCounsel

LegislatureApprovesPlanforIncreasedRoadFunding,PublictoVoteinMay2015

4 Executive PerspectiveContractorsshouldbeawareoftwokeycomponentsthathelpABCmembersdeliverworksafely,effectively,andaffordably.

6 Joint Ventures Offer Opportunity, Require Counsel

Jointventurescanbeaneffectiveway

tohelpcontractorslooking toexpand

orenternewmarkets.Althoughthe

opportunitiescanbeenticing,companies

needtoproceedwithguidancefrom

trustedcounsel.

10 Time for Repeal: The Outdated Prevailing Wage Law Turns 50

ThePrevailingWagelawis50yearsold.

Will2015bringlong-awaitedreliefto

MichigantaxpayersandABCmembers?

12 Recent History Offers Economic Insight

Withjobformationatareducedrate,will

therebesufficienteconomicmomentum

tofurtheracceleratethegrowthratein

commercialconstructionin2015?

22 ABC of Michigan 2014 Annual Report

24 Get to Know Your Lawmaker

MeetthenewSenateMajorityLeader

ArlanMeekhof(R-WestOlive)and

newlyelectedRepresentativeJimTedder

(R-Clarkston)ofthe43rdDistrict.

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S I D I N G W O R L D.C O M

EVERYTHING EXTERIOR

We’ve Got YouCOVERED

If Your Subs Don’t Use SIDING WORLDYou Are Probably Paying Too Much

CHECK US OUT!

CertainteedNapcoExteria

Quality AluminumJames Hardie

New Construction& Replacement

VinylmaxPly GemSilverline

WeathershieldPella

Alliance Windows

18 Colors in StockRun To Any Length

While U Wait

60 Colors in StockQuality Aluminum

Napco

AtlasCertainteed

InspireAmerican Building Component

Metal SalesQuality Aluminum

ClipStonePly Gem

StoneCraft

SIDING

ROOFING

STONE

VINYL WINDOWS

SEAMLESS ALUM GUTTERS

ALUMINUM TRIM COIL

SUBCONTRACTORREFERRALS

FOR YOUR PROJECT

SANFORDSAGINAW

CLIO

WATERFORD

MADISONHEIGHTS

CHESTERFIELD

DETROIT

WYANDOTTE

FENTON

BATTLECREEK JACKSON

LIVONIA

INKSTERKALAMAZOO

SOUTH BEND

GOSHEN

TOLEDO

6460 E. Eight Mile RdDetroit, MI 48234

313.891.2902

562 S. Reynolds RdToledo, OH 43615

419.535.1100

517 Comstock AveKalamazoo, MI 49048

269.382.6260

51236 SR-933South Bend, IN 46637

574.272.8200

3505 Ann Arbor RdJackson, MI 49202

517.764.0888

2151 Eureka RdWyandotte, MI 48192

734.284.7171

11240 N. SaginawCilo, MI 48420810.687.4730

30391 Stephenson HwyMadison Heights, MI 48071

248.585.9050

5393 N. Michigan RdSaginaw, MI 48604

989.754.3440

5211 Williams Lake RdWaterford, MI 48329

248.674.1300

2262 Meridian RdSanford, MI 48657

989.687.7313

49599 N. GratiotChesterfield, MI 48051

586.598.7600

30626 W. Eight Mile RdLivonia, MI 48152

248.478.8984

1605 W. Columbia AveBattle Creek, MI 49015

269.969.2806

418 Blackport RdGoshen, IN 46528

574.532.1591

3000 Middlebelt RdInkster, MI 48141

734.728.0400

195 S. Alloy DrFenton, MI 48430

810.714.9300



MovINg oNWaRd IN 2015

With2015alreadyinfullswing,ABCofMichiganhasgeareduptodefendandadvancetheabilityofMeritShopcontractorsbyhelpingmembersdeveloppeople,winworkanddeliver thatwork safely, ethically,profitably and forthe betterment of thecommunities in whichABC and its memberswork.

ThisissueofMichigan

Merit explores twoissues that affect

winning work and delivering it to the betterment of ourcommunities.Thefirstisourcoverstoryaboutjointventuresandwhentheyareagoodidea,aswellasawordofcautionforwhentheyaren’tnecessary.

TheotherhottopicisthelatestefforttoimproveMichigan

and our communities by taking on the state’s prevailingwage law which is costing communities more than $250millioneveryyearandharmingtheabilityofconstructionprojectstogetunderway.Effortsareunderwaybothinthecourtsandthelegislaturetoendprevailingwageasweknowit,notjustatthestatelevel,butlocallyaswell.

Morethanever,ABCmembersareleadingthewaytohelpbuildourstateandcreatepositive

andlastingchange.Onward!YoursfortheMeritShop,

ChrisFisher

ASSOCIATEDBUILDERSandCONTRACTORSofMICHIGAN

2015 BOARD of DIRECTORS

Dan Murphy, ChairmanMAG InsulationGreater Michigan Chapter

Mike Houseman, Vice-ChairmanWolverine Building GroupWestern Michigan Chapter

Dave Sheffield, Secretary-TreasurerOnslow-Sheffield, Inc.Southeastern Michigan Chapter

Brian Stadler, Immediate Past ChairWolgast CorporationGreater Michigan Chapter

Chris BeckeringPioneer ConstructionWestern Michigan Chapter

Jim CrippsCripps Fontaine Excavating, Inc.Western Michigan Chapter

Rick JacksonJackson Associates, Inc.Southeastern Michigan Chapter

Michael MarksThe Mackenzie CompaniesGreater Michigan Chapter

Dave Mollitor Consolidated Electrical ContractorsGreater Michigan Chapter

Bill MolnarWm. Molnar Roofing Co., Inc.Southeastern Michigan Chapter

Jack VandeGuchteWestern Michigan Chapter

MICHIGAN MERIT CONTRIBUTORS

Publisher: Christopher Fisher

Managing Editor: Mary Boardway, CAE

Communications Coordinator: Elise Layton

ABCMI Economist: Don Wilson

Printing: Keystone Millbrook

Graphic Design: Ink Ideas Graphic Design

Advertising: Strategic Value Media

Editorial: Lezotte Miller Public Relations

Michigan Merit (ISSN# 1938-9051) is the official publication of Associated Builders and Contractors Inc. of Michigan (ABC of Michigan) and is published quarterly at 230 N. Washington Sq., Suite 202, Lansing, MI 48933, (517) 853-2545. Please direct all inquiries to the previous address. Articles written by outside authors do not necessarily reflect the views of Associated Builders and Contractors Inc. of Michigan. ABC of Michigan reserves the right to reject or edit all material submitted for publication. The appearance of an advertisement in Michigan Merit does not constitute endorsement of the advertiser, its products or services, nor do Michigan Merit or Associated Builders and Contractors Inc. of Michigan guarantee or warrant any claims or offers made by the advertisers.

Permission to reprint in whole or in part is hereby granted, provided the following credit line is used: “Reprinted by permission from Michigan Merit, a publication of Associated Builders and Contractors Inc. of Michigan.”

Efforts are underway both in the courts and the legislature to end prevailing wage as we know it, not just at the state level, but locally as well.


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Joint Ventures

offer opportunity, require counsel

FISHER GUDMUNDSEN McNALLY ROBER STADLER


Like a growing number of Associated Builders andContractors of Michigan members, Saginaw-basedWolgast Corp. has entered into joint ventures withother contractors in order to help keep work in the

company’spipeline.“Everyfewyearswegetinvolvedinone,”saysWolgastPresident

Brian Stadler.“Intheory,oneortheothercontractorcouldn’tgetthejobbythemselves,buttogethertheyhaveallthecapabilitiestowinthecontract.”

Often, it’s the case that one contractor has the expertise orspecificskillthat’srequiredforthejob,whiletheotherpartyhasarelationshipwiththeprojectowner,engineerorarchitectthatgivesitaninsidetrack.Wolgasthasbeenonbothsidesofthatequation,Stadlersays.

In another common joint venture scenario, governmentcontracts often require that a certain amount of the work goto a minority- or women-owned firm, which then partnerswith another, typically larger contractor. Also, it’s common forcompanies to band together to ensure financing or bondingcapacity.

Whatever the reasons, joint ventures are becoming anincreasinglypopularwayforcontractorstokeepworkflowingorenternewmarkets.

“I think that they have become much more common,” saysSean McNally, anattorneyatKotzSangsterWysockiP.C., andABCmemberwith lawoffices inDetroit,BloomfieldHills,AdaandNiles.“Ithinkinthelastfivetosevenyears,you’veseenmuch

moreofit.”From the owner’s perspective,the appeal of joint ventures is

simple, says Gary G u d m u n d s e n ,

an attorneywith Braun

Kendrick Finkbeiner P.L.C.,anABCmemberwithlawofficesinSaginaw,Mt.PleasantandMidland.

“Morethananything,they’rejustlookingtoidentifythepartnerwhohastheresourcestogetthejobdoneattherightpricepoint,”hesays.

Stadler says joint ventures are oneway for owners to ensurecompetitionforajobbyincreasingthepoolofqualifiedbidders.Otherwise,perhapsonlyacoupleof largecontractorswillhavethe expertise, experience or financial wherewithal to meet thejob’srequirements,hesays.

‘Win-Win Situation’ Although it may be a trend, joint ventures aren’t always

necessary,cautionsChris Fisher,ABCofMichiganpresident.Toooften,forvariousreasons,aprojectownerorarchitectwillrequireajointventureonaprojectevenwhenbiddersarefullycapableofmeetingthecontract’srequirementsontheirown,hesays.

“Sometimesinhindsight,contractorshaverecognizedthatthejointventurewasn’treallynecessary,”heexplains.“Thecompanywasfullycapableofhandlingtheentireprojectbutdidn’trecognizeitupfront.Bybringinginanoutsideentity,thejobtookonmorecomplexity, added more paperwork and didn’t really enhancethefinaloutcomefortheclient.Acarefulassessmentgoinginisessentialtoavoidingregretslater.”

Still,intoday’smarketplace,therealityisthatcontractorsoftenmustbewillingtoconsiderenteringa jointventure inordertowinworkorexpandtheiroperationsgeographicallyorintoanewmarketsector,adviserssay.

Theeconomy—inparticular,thedoldrumstheconstructionindustry entered during the 2008 economic downturn — isonefactordrivingtheincreasinguseofjointventures.AsworkbecamehardertocomebyinMichigan,manycontractorsbeganlookingforout-of-stateopportunities,saysDoug Rober,apartnerin the East Lansing office of accounting firm Plante Moran, an

whether to increase the flow of new business from a trickle to a steady stream, gain an inside track on a potential contract or to fulfill a minority requirement, joint ventures can help contractors looking to expand or enter new markets. although the opportunities can be enticing, companies need to proceed with caution and with guidance from trusted counsel.


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ABCmember.Forexample,Robersays,aMichigancompanymight havethe

expertise to complete an out-of-state job but it lacks the localconnectionsorworkforce,soitteamsupwithacontractorfromthatareathatoffersboth.Theconversemightalsoholdtrue,inwhich an out-of-state company supplies the expertise and theABCofMichiganmemberbringsitslocaltiestothetable.

“It’susually awin-win situation,”Rober says. “Neitherof thecontractors would have been able to win the contract on theirownotherwise.”

Teamingwithacontractorwithaspecializedexpertisecanalsopaydividendslongafterthejointventureisdissolved,Robersays.Itmayhelpacompanygainafootholdinacertainsector,suchasmedicalfacilities,andeffectivelyburnishitsresumesothatitcanpresent itselfas fullyqualified in thatparticularfieldgoingforward—perhapstotheextentthatitwon’t needtoformajointventureforafutureRFQinvolvingasimilarproject,hesays.

But as advantageous as joint ventures might sometimes be,attorneys and certified public accountants who advise ABC ofMichigan members say contractors would be wise to considerseveralissuesbeforeenteringintoone.

Sean McNally, an attorney at Kotz Sangster Wysocki P.C., offers this checklist to help ensure joint venture success:• Involve legal and accounting professionals

when establishing the joint venture, in order to save time and money later.

• Make sure you understand how money will flow in and out of the joint venture.

• Do not reuse joint venture agreements from other projects. You run the risk of leaving specialized provisions in (or out).

• Understand the duties and risks imposed on you by the agreement.

• Cancel the general agreement of indemnity when the project ends to avoid exposure to your partner’s obligations on other projects.

• Understand the licensing requirements for the work to be performed.T

IPS F

OR S

UCCESS

JointVentures


Conduct due diligenceGudmundsen says that while there’s no “cookie-cutter

approach”toforgingjointventureagreements,thesametypesofconsiderations gointostructuringeachofthem.

Broadlyspeaking,eachagreementmustspelloutthelegalandtax framework of the joint venture, as well as the operationalaspectsofthebusinessrelationship.Thefinedetailsoftheultimatestructure,however,willdependonthenatureoftheproject andthepartnersinvolved.“Allpartnerswillhavecertainitemsthatareimportanttothem,”Gudmundsensays.

McNally cites a number of considerations involved withstructuringajointventure,including:

• Entitychoice—Threebasictypesareusedtoformjointventures: corporation, partnership or limited liabilitycompany

• Managementstructure• Disputeresolution,intheeventofamanagementimpasse

ormemberdefault• Capitalcontributions,bothinitialandongoing• Distributions of profits, during the project and at its

conclusion• Reimbursementsforlabor,equipment,etc.• Memberindemnityforclaimsandlosses• Bonding• Licensesandregulatoryrequirements• DivisionofworkorscopeOnce the specific parameters are agreed to, the legal

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documentationrequiredforajointventureistypicallystraightforward,Gudmundsen says.“Youjustwanttoavoid leaving things open-ended,” henotes.“Themoredefinedyoucanmakeit,thebetter.”

avoid “Culture Clashes”While attorneys and accountants can help ensure that the

paperwork requirements are sewn up tight, a joint venture’sultimatesuccesscomesdowntoalesscut-and-driedconsideration:choosingtherightpartner.

“I’venotseenalotofsignificantissuesforjointventuresthatI’ve been involved in, but I have heard of some,” Rober says.“Usuallyit’saresultofnotpickingtherightpartnerupfrontandtherebeingabadculturefit.Itisveryimportanttoknowwhoyou’regettinginvolvedwith.”

Robersayscommonmembershipinindustryassociations,suchasABC,isonewaytoscreenforpossiblecultureclashes.

Stadler agrees that industrynetworking ispart of the vettingprocess to ensure that apotential joint venturepartnerhas thecapacityandcharacter toproperlycompleteaproject. Wolgastalso identifies partners that have the necessary expertise byconductingresearchontheInternet.

“Youcan’tpossiblycovereveryaspectofaprojectinacontract,”Stadlersays.“Alotofitiswhoarethepeoplepersonally.Ineveryjointventure,onepartnerwillhavemorecontrolorpower,andyouneedtoknowthey’rereliable.”MM


As2014drewtoaclose,Michigan’sprevailingwagelawwasstillonthebooks—and,notesChrisFisher,AssociatedBuildersandContractorsofMichiganpresident,continuingtodrainmillionsofdollarsayear fromthestate’spublicuniversities,communitycollegesandschooldistrictsbydrivingupconstructioncosts.

But2015maybringlong-awaitedrelieftoMichigantaxpayersandABCmemberswhohavehadtocontendwiththelaw’soften-byzantinewagecalculations fornearly50years. TheveryfirstHouseandSenatebillsintroducedinthe98thLegislativeSessionarebothbillsthatwouldrepealprevailingwagerequirementsonstate government-backedconstructionprojects.Theprimacyofthis issueon the legislative calendar is akey indicator that thenewlyconfiguredLegislature,inwhichRepublicansholda63-47majority in theHouse and a 27-11 advantage in the Senate, isreadytotackletheissueheadon.Reps.AmandaPriceandBradJacobsen,alongwithMajorityFloorLeaderAricNesbitt,arethesponsorsofthelegislationintheHouse.Alsoapromisingsignforrepeal,SenateMajorityLeaderArlanMeekhofhassponsored

TIMEFORREPEAL

the Senate version and remains a key proponent of killing theoutdatedwagerequirements.

Fisher is certainly hopeful that 2015 will bring an end toprevailingwageinMichigan.

“EveryindicationisthatthenewLegislatureispoisedtohaveahealthydiscussiononthewastefulnessofprevailingwage,”hesays.“I’malsoconfidentthatacloseexaminationofthelawwillleadtoitsrepeal.”

Michigan’s prevailing wage law, on the books since 1965,requires thatwagesonconstructionprojectswhosefinancing isbackedbythestateadheretothe“prevailing”wagefortheareainwhichtheprojectislocated.Thelawrequiresallconstructionfirmstopullthesewageratesandcorrespondingworkrulesfromprovisions in union agreements, even though unions representless than 20 percent of the construction workforce. PrevailingwageopponentsarguethatMichigan’slawlackstransparency,astaxpayers,publicofficials,andeducationalentitieshavenoplaceatthebargainingtablewhenwagemandatesareissued.

THE OUTDATED PREVAILING WAGE LAW TURNS 50 IN 2015


Prevailing Wage Repeal is Legislature’s First Introduced Bill of 2015


articlearticleF E A T U R E

Whiletheultimatefateoftheintroducedrepeallegislationistobedetermined,Fishersays,“Icansaywith certaintythatABCofMichiganisplanningaconcertedpushtohighlighttheabsurdityandblatantunfairnessof‘prevailing’wagemandates,especially atatimewhengovernmentunitsarecopingwithtighteningfinances.”

Towardtheendof2014,ABCscoredavictorywhentheMichiganSupremeCourtagreedtohearitslawsuitthatchargedthecityofLansing’sprevailingwageordinanceisunconstitutional,anactionthatcouldleadtotheinvalidationofalllocalwagemandatesinthestate.Manylocalgovernmententitiessuchascitiesandcountiesrequiretheirown,separateprevailingwageagreements,leadingtoincreasedcostsandfurtheradministrativecomplexity.

As the court prepares to hear the local level prevailing wagecase,ABCofMichiganispreparinganall-outlobbyingandpublicrelationsblitztorepealthestatelevellaw.

It’s not unlike battles the association has fought before. In2011,ABCofMichigansuccessfullyworkedtopasslegislationtoendgovernment-mandatedProjectLaborAgreements.Fouryearslater(andtwoyearsafterthestate’sadoptionofRighttoWork),ABCmembers say theirhighest legislative priority is an end toprevailing wage in 2015. Legislation that would have repealedthelawwasalsointroducedinbothlegislativechambersin2014but failed togain tractionas the legislaturegrappledwith roadfundingandothercontentiousissues.

Now,asfreshmenlegislators–manyofwhomareMeritShop-friendly–getuptospeedintheirnewoffices,theeffortismoreabouteducatinglawmakerswhoarelikelytoprovereceptivetoABC’sfree-marketmessage,Fishersays.NotonlyaLansingeffort,ABCmembersmustengagedirectlywithlegislatorstoshowthereal-worldimpactofthiscostlylawontheirbusinesses.

“Wehavealwayshadthefactsonourside,”notesFisher.“Prevailingwageisaspecialinterest-drivenwagemonopolythatrunscontrarytothebestinterestsofMichigancitizensandcommunities.”

Fisher continues, “not only is the law costly and outdated, butitalsodenieslocalchoicetoschoolanduniversityleaderswhoare

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entrustedbycitizenstowiselymanagefinancialresources.Prevailingwagerequiresthepublictopayartificiallyhighwagesonstate-backedconstruction projects, reducingmoneyforothervitalneedswithnoreturnoninvestmentforsuchunjustifiablecostoverruns.”

A2013studybyEastLansing-basedAndersonEconomicGroup(AEG) added to what Fisher calls the ever-mounting evidenceaboutthewastefulnessofprevailingwage.

“Overthepast10years,Michigantaxpayersspent$224millionmore on construction projects for K-12, community colleges,and higher education than they would have without the state’sprevailing wage law increasing construction costs,” says AlexRosaen,aseniorconsultantatAEGandoneofthestudy’sauthors.

Fisher maintains the amount of money lost to educationalprevailingwagewasteoverthepastdecadecouldhavefinancedtheconstructionofmorethan315elementaryschoolbuildingsatnoadditionalcosttothepublic.

Inadditiontothelaw’scostliness,someseetheissueasoneofcreatingacompetitivebusinessenvironmentasMichiganseekstosolidifyitseconomiccomebackofthepastfouryears.

Michiganisoneofjust6statesthathavesimilarlawsapplyingtotheconstructionindustry. Theother44eitherhavenosuchmandateormorefairlyandaccuratelydeterminewagesbasedonanactualsamplingofconstructionworkers.Theartificiallyhighwagemandatesequatetowellabovethe$47,000earnedannuallyonaveragebythestate’sconstructionworkers.

Thataveragesalary,accordingtostatistics fromtheBureauofLaborStatistics,isalreadyagoodwage.“ConstructionisalreadymorehighlycompensatedthanmostotherindustriesinMichigan,”Fishernotes.“Theunnecessaryoverspendingismoneythatcouldhave been invested in necessities such as hiring new teachers,upgradingtechnologyorbuildingnewschools.”

“Michigan’s taxpayers have already paid dearly for prevailingwage mandates during the past five decades,” he says. “I’mhopefulthatthecurrentLegislaturewillfinallyputanendtothewastefulnessbykillingthelawonceandforall.”MM


By don Wilson

Statewide value (adjusted for inflation)of construction put into place in non-residentialstructuresinMichigandove32%in2013,followingan11%dropin2012,a34%surge in2011,a9%rise in2010anda 40% dive in 2009, as portrayed in Chart

#1. Job change (advanced one year as a leading indicator ofconstructionspending),afterdropping4.7%in2008and5.5%in2009,increasedjust1.4%in2010,2.4%in2011and1.9%in2012.The reason for suchmoderate jobcreation is that thebusiness sector, as inmanyother areasof the country,hashadlittle incentive to expand business operations in recent years.Also, commercial and industrial spacevacancieswerehighandloans for commercial mortgages have been hard to obtain due

DevelopmentDevelopmentB U S I N E S S

REcENT HiSToRY oFFERS

ECoNoMIC INSIgHTtohighdefaultrates.Asaresult,theproportionofconstructionspendingrelatedtoredevelopment,alteration,orrenovationroseandworkforbuildingofnewspacediminished.

Job creation in Michigan grew 1.3% year over year in 2013andonly1.0% through thefirst sixmonthsof2014.With jobformationat this reducedrate thequestion thenariseswhethertherewillbesufficienteconomicmomentum,besidesjobcreation,tofurtheracceleratethegrowthrateincommercialconstructionin2014and2015?

The expansion following the prior most serious contractionof the nation’s economy (in the early 1980s) can provide aninteresting case study to help answer that question. Currenteconomic growth is much slower than the 1980s expansionbecauseofaslowerrateofspendingandinvestment.

Overalleconomicrecoverysincethestartof2009’sthirdquarterhasgrownjust9.1%followingthe4.2%downturnin2007-2009,

-250!

-200!

-150!

-100!

-50!

0!

50!

100!

150!

0!

1000!

2000!

3000!

4000!

5000!

6000!

7000!

8000!

9000!

10000!

1997! 1998! 1999! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012! 2013!

Source: U. S. Bureau of Labor Statistics & Bureau of Census surveys !

Employment (000)!Value of Constructtion (2007$-Billions)!

Chart # 1!MICHIGAN NON-RESIDENTIAL CONSTRUCTION PUT IN PLACE / CHANGE IN PRIVATE & PUBLIC SECTOR

EMPLOYMENT!Value of Construction Put in Place!

Change in Miichigan Non-farm Employment (Advanced One Year)!


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Source: U.S. Bureau of Economic Analysis. Exports and imports are for both goods and services.

TABLE #1 TREND OF CHANGE U.S. GROSS DOMESTIC PRODUCT (% Year Over Year)

Sector 1983 1984 1985 1986 1987 09Q3-10Q2 10Q3-11Q2 11Q3-12Q2 12Q3-13Q2 13Q3-14Q2

Gross Domestic Product 6.4 6.3 4.1 3.1 3.9 0.2 2.3 2.0 1.9 2.4

Consumer Spending 6.3 5.0 4.9 4.1 3.6 0.2 2.6 1.8 2.1 2.4

Residential Investment 43.6 7.7 4.4 11.8 -0.3 -7.9 -5.1 8.9 14.0 6.2

Export Trade 0.6 8.4 2.7 8.4 13.8 3.4 10.0 4.5 2.4 3.6

Import Trade 20.2 18.2 6.6 8.4 5.7 -0.1 10.8 3.3 0.9 2.7

Government Spending 3.4 4.6 6.7 5.1 2.3 1.8 -1.7 -2.6 -1.5 -1.5

Non-residentialInvestment Structures 5.9 16.0 2.8 -13.7 1.8 -23.7 -6.1 13.2 2.0 5.1

Equipment 12.7 16.2 3.4 0.3 2.5 -4.5 16.9 11.8 3.6 5.4

asmeasuredbyGrossDomesticProduct(GDP)–thevalueofU.S.outputofallgoodsandservices.1980’sfirstandthirdquarterssawaneconomicshrinkageof2.2%,followedbya2.7%shrinkageinthethirdquartersof1981through1982;theeconomythengrew

26.1%during the1983-87period.Thus, thecurrent recovery’supturnisonly35%ofthatlate1980sgrowth.

Table#1providesmoreinsightintoannualchangeinthemajorsectorsofGrossDomesticProduct(adjustedforinflation),since


• • • •

•

• •

• • •

• • • •

•

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mid-year2009,comparedwith1983-87.Consumerspending(two-thirdsoftheGDPcomprisingdurable

andnon-durablegoodsandservicesoutlays),up9.4%(fromthestartofJuly2009andendingJune2014),climbedabovethe3%leveljusttwiceoverthosetwentycalendarquarters.Thatisjustaboutathird(36%)asmuchas1983-87’sgrowthrateof26.4%.

Consumer purchasing power remains constrained by slowgrowth in employment andwageand salary earnings (adjustedfor inflation) which have risen by only 4.3% nationwide overthatsameJuly2009-June2014period,comparedwith2.8%inthe2002-06expansionand36%in1983-87.Manyhouseholdsarestillpayingdowndebtobligations,thinkingtwiceaboutnewborrowing and keeping more cash on hand in their checkingaccounts. Housing activity, including purchase of new andexistinghomes(animportantstimulantofconsumerspending),isonlyimprovingslowly.

Residential investment usually drives some non-residentialoutlays, especially during periods of brisk economic growth.Dampened by an excessive inventory of foreclosed properties,high unemployment and tight mortgage lending standards,housing investment increased only 15.3% from July 2009

throughJune2014, anamountthatis justone-fifthofthe80%growthpostedin1983-87.Residential investmentslowedagainin2014forthreereasons:anincreaseinmortgageratessinceearly2013,theunusuallycoldwinter,andanothermodesttighteninginlendingstandards.

ThetrendofthenumbersshowninTable#1indicatethereisplentyofworlddemand forU.S.productsandservices.Exporttraderose5.2%peryearonaverageduringthecurrentrecovery,justtwo-thirdsthe1983-87growthrate.Importtradeincreased3.7% (per year) annually in the current recovery (three-tenthsthe 11.5% growth rate in 1983-87). The increase in domesticmanufacturing and petroleum exploration and production ishaving a favorable effect on reducing our reliance on overseassupplies,buttheratesmentionedabovealsoindicatesluggishnessinconsumergoodspurchasing.

Incontrasttothe1983-87period,expendituresbyalllevelsofgovernmentdeclinedintheperiodfromJune2010throughJune2014 (after increasing in July 2009 to June 2010 with passageof the2009 stimulus legislation).Reductions in state and localbudgets account for much of the spending cutback as units ofgovernmentgrappledwiththedecreaseintaxesthatfollowedthe



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1983 1984 1985 1986 1987 09Q3-10Q2 10Q3-11Q2 11Q3-12Q2 12Q3-13Q2 13Q3-14Q2

Contract Awards 1.5 13.8 7.3 -3.1 6.2 -5.1 -5.9 -4.0 -1.1 3.2

Construction Put in Place 7.6 19.5 15.1 -7.8 -1.7 -21.0 -9.0 19.0 5.0 8.0

TABLE #2 TREND OF CHANGE IN U.S. NON-RESIDENTIAL CONTRACT AWARDS& CONSTRUCTION PUT INTO PLACE (% Year Over Year)

Source: U.S. Bureau of Economic Analysis and Bureau of Census

declineinassessedpropertyvalues,andtheeffectsofweakeninghousehold earnings caused by higher jobless rates. Federalspendingwasalsocutfollowingtheonetime“stimulus”infiscal2009-10.

Non-residential investment, as summarized in Table #1,includes capital expenditures for structures, equipment, andsoftware(excludinginventories).Investmentinalltypesofnon-residentialstructures(adjustedforinflation),hasshrunk 2.7%onaverageper year frommid-year2009 through June2014,ninetimestheannual0.3%slippageinthefiveyearperiodof1983-87.

Table #2 summarizes the impact that changes in the broad

nationaleconomicsectorslistedabovehashadonvalue(adjustedforinflation)ofU.S.contractawardsfornon-residentialstructuresandconstructionputinplace.

Toprovidesomeinsightintotheeffectsthatchangesinbroadsectionsoftheeconomyatthenationalandstatelevelhavehadon non-residential building construction at the state level, thesubsequenttablesandparagraphscomparedatafromthecurrentrecoveryinMichigan,theGreatLakesarea,andtheU.S.asawholewithsimilarinformationforthevigorous1983-87recovery.

Consumer spending at the state level is onlymeasureablebyestimatesofretailspendingasfeaturedinTable#3.Sincethestart


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1983 1984 1985 1986 1987 09Q3-10Q2 10Q3-11Q2 11Q3-12Q2 12Q3-13Q2 13Q3-14Q2

Michigan 9.7 10.9 11.3 7.2 4.5 -1.2 7.3 3.5 4.3 0.6

Great Lakes Area 7.7 9.8 8.2 4.6 4.4 -1.4 5.0 4.1 3.8 2.4

U.S. 9.5 10.0 6.8 5.4 6.3 0.7 6.5 6.7 4.0 4.5

TABLE #3 TREND OF CHANGE IN RETAIL SALES (% Year Over Year)

Source: State Departments of Revenue & U.S. Bureau of Census

1983 1984 1985 1986 1987 09Q3-10Q2 10Q3-11Q2 11Q3-12Q2 12Q3-13Q2 13Q3-14Q2

Michigan 50.7 29.4 35.7 25.5 -1.3 8.9 17.3 14.4 45.1 19.0

Great Lakes Area 72.9 14.4 24.6 41.8 13.0 2.0 -9.3 13.5 29.3 16.9

U.S. 71.1 12.1 9.3 16.1 -0.3 0.6 -5.0 20.0 35.4 14.9

TABLE #4 TREND OF CHANGE IN RESIDENTAL INVESTMENT (% Year Over Year)

Source: U.S. Bureau of Census


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of the current recovery, retail sales (not adjusted for inflation)acrossthenationhaverisenatonly42%ofthe1983-87increase.In Michigan, retail spending has improved at only 29% of its1983-87growthandintheGreatLakesstatesatjust36%ofthemid-1980s’ rates. Even though the labor market is deliveringjobs,retailspendingremainsweakasaresultofslowjobcreation,skimpyearningsgrowth,andslowerconsumer debtgrowth,allofwhichcurtailhouseholdspendingpower.

Table #4 profiles residential investment (not adjusted forinflation). In the five year period from mid-year 2009 throughmid-year2014comparedwith1983-87,homebuildingwas56%

lowerinMichigan,32%nationwideand20%intheGreatLakesstates, according to surveys of municipal and county buildingdepartments.Housingactivity slackened in the lastyeardue torisingmortgagerates,thesevere2013-14winterandatighteninginlendingstandardssince2013.

Residential investment also has another influence on non-residential. In recentyears, someconstruction tradespersonnelhavebeenabletomaintaintheirskillsbyworkinginthehousingsector while awaiting an increase in non-residential buildingwork.

Table #5 compares trend changes in the value of the export


1983 1984 1985 1986 1987 2010 2011 2012 2013 2014

Michigan 28.3 8.4 3.0 -6.4 35.8 37.3 13.8 11.7 2.8 18.0Est

Great Lakes Area 25.3 12.0 4.6 4.4 28.1 25.0 17.2 6.7 0.6 15.0Est.

U.S. -4.4 9.0 -1.8 3.4 12.0 20.5 16.2 4.2 2.0 25.0Est.

TABLE #5 TREND OF CHANGE IN EXPORT TRADE OF GOODS (% Year Over Year)

Source: U.S. Bureau of Census. Only export data of goods were tabulated by state in the 1980s.


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TABLE #6 TREND OF CHANGE IN GOVERNMENT SPENDING (% Year Over Year)

1983 1984 1985 1986 1987 2010 2011 2012 2013 2014

Michigan

State & Local 6.4 6.8 4.8 11.7 5.1 3.7 2.4 N/A N/A N/A

Federal 10.9 1.6 9.5 5.3 -0.2 -1.2 N/A N/A N/A N/A

Great Lakes Area

State & Local 6.6 7.6 6.8 8.9 6.5 5.3 2.2 N/A N/A N/A

Federal 17.8 -2.0 10.3 6.7 0.1 -4.0 N/A N/A N/A N/A

All States in U.S.

State & Local 12.7 3.0 9.7 9.3 8.3 2.0 0.3 2.2 1.2 N/A

Federal 11.4 4.0 8.9 5.4 2.0 1.2 N/A N/A N/A N/A

Source: U.S. Bureau of Census N A.: Not Available. Comprehensive data for state and local spending is not available after fiscal year 2011 due to the time required to complete and tabulate surveys at all levels of public administration, judiciary and education. Federal data was discontinued after 2010.


tradeofproducts(notadjusted forinflation).ExportsinMichiganduring2010-14roseslowerthanduringthe1983-87period,at59%of thatpace,while theGreatLakes states areawas at just27%,andtheU.S.asawholewasat57%.Muchof theactivityinMichiganandtheGreatLakesareain2014isestimatedtohavedeclinedduetothe2013winter’sharsheffectontransportationandsomeproduction.

Table#6compares apartialprofileof theannualvalue (notadjusted for inflation) of federal outlays and statewide andlocal government expenditures by fiscal year. No meaningfulcomparisonsarefeasiblebecauseofthelackoftimelyinformationlaterthan2011.

Table #7 profiles the influence of change in all economic


sectors on employment and approved investment plans forconstruction of commercial space, as measured by the value(adjusted for inflation) of non-residential contract awardsauthorizingstartofwork.AlsoincludedisU.S.investmentinbusinessequipment.Dataonequipmentinvestmentbystateisnotavailable.

Employment in Michigan has grown by an average of 1.6%peryearsincemid-year2009(comparedwith4.1%in1983-87);1.1% in theGreatLakesStates (3.1% in themid-eighties); and1.2%acrosstheU.S(3.4%inthemid-eighties).

ContractawardsinMichiganduringthecurrentrecoveryshrankby 3.7% per year (versus 24.7% growth in 1983-87); declined6.5% in Great Lakes states (compared to a 15.7% increase in

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TABLE #7 TREND OF CHANGE NON-RESIDENTAILBUILDING CONTRACT AWARDS & EMPLOYMENT (% Year Over Year)

1983 1984 1985 1986 1987 09Q3-10Q2 10Q3-11Q2 11Q3-12Q2 12Q3-13Q2 13Q3-14Q2

Michigan

Employment 5.4 4.2 5.6 2.0 2.0 0.6 2.0 2.1 2.1 0.9

Awards 7.8 58.4 16.5 19.1 22.0 -19.8 24.0 - 6.6 -1.2 -14.9

Great Lakes Area

Employment 3.4 3.5 2.5 2.2 3.1 -0.4 1.2 1.8 1.1 1.2

Awards 25.8 19.1 11.8 5.9 15.9 -27.9 8.6 -12.5 3.3 -4.0

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Employment 4.7 4.7 2.6 1.9 3.4 0.4 1.1 1.6 1.7 1.9

Awards -2.0 16.7 9.9 -1.8 7.6 -5.4 -5.9 -4.0 -1.1 3.2

Equipment 12.7 16.2 3.4 0.3 2.5 -4.5 16.9 11.8 3.6 5.4


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themid-eighties); anddecreased2.6%annuallyacross theU.S.(versusa10.6%yearlyincreasein1983-87).

Nationwideinvestmentinequipmentsince2009hasincreasedata6.6%annualratecomparedwith 7.0%growthin1983-87.

Atpresent, investment in commercial structuresnationwideis still18%below its2008peak,while residential investmentis43%beneathits2005crest.There isstillexcessproductioncapacity and commercial building vacancy. Credit standardsremain high for many, too, especially for small businesses. Abright spot: profits, a key driver of investment, continue toimprove.

The lacklusterperformance in theoverallU.S.economyoverthe last five years has curtailed American business owners’expectations for growth, resulting in only modest increasesin hiring. One of the objectives of investment is to increaseproductivitytooffsetrisinglaborcostsandincreaseprofits.Wagesandsalaries,however,have risenonly4.3%during thecurrentrecovery,ortheequivalentofjustunder0.9%peryear.Muchofthisisduetothefacttheoveralllaborsupplyremainsplentifulinmanyareas,withshortagesinonlysomeskilledoccupationssuchasconstruction.

Implementation of the federal Affordable Care Act (ACA)


in2014hasalsoputanotherdampneronexpansionandjobcreation.Manyemployershave initiatedactiontoavoidACArequirements by limiting the number of workers on theirpayroll and cutting weekly work time from forty to thirtyhoursorless.

Themissingcomponentforthecurrenteconomicrecoverynationwidetobequickerormorerobustseemstobeahigherlevelandrateofinvestment,whichisabsentforthereasonsnoted above.The goodnews is thatmanyof the indicatorsdiscussed above are just slightly better in Michigan thanin the nation as a whole (as compared to the mid-eighties’recovery).MM

Don Wilson is a consulting economist, with offices in Hartland, Michigan, who specializes in economic and business research for trade associations and banking institutions.

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22 WINTER 2015 MichiganMerit

Much of the association’s work in 2014 was driven by the General Election in November, since maintaining the Merit Shop momentum of the past four years was a critical element of how successful the Merit Shop in Michigan can be in the future.

ABC of Michigan is pleased to report that the election was an overwhelmingly positive success for our members. Our endorsement win rate for the election was 93%, and our state legislature is now more Merit Shop friendly than ever before, with the election giving us a net gain of pro-growth lawmakers. This was made possible by two years of advocacy, lobbying, and fund raising across the state.

In 2014, ABC of Michigan members raised more funds than ever before in the history of the PAC, which included candidate events, direct PAC fund raising and candidate support, and independent expenditures on behalf of candidates.

In addition, the association launched a new tool to assist in our advocacy efforts – a Super PAC aptly named the ABC of Michigan Merit Fund. In 2014, the Merit Fund allowed us to assist candidates who were in the most contested races in the state with mailings and radio spots that made the difference in the final days of most of those races.

This legislative and election work allows ABC of Michigan to be an effective partner for its nearly 1000 member companies to grow and be successful in a Merit Shop friendly business environment.

In addition to election victories, ABC of Michigan saw several pieces of legislation successfully passed that promote fair labor practices and give Merit Shop firms a greater opportunity to win work and do it more efficiently and profitably in the state. A major piece of legislation also passed this year provides Michigan’s students with greater opportunity to pursue skilled trades training, which should help fill the skilled worker pipeline for our state.

The spotlight of the year should truly be focused on the ABC of Michigan membership, which showed our communities, once again, that they care and are committed to giving back to those communities. The Michigan Merit summer 2014 issue featured a number of member companies throughout Michigan that make helping others in their communities a key part of their businesses’ operations.

In 2014, ABC of Michigan’s key accomplishments supporting the growth of your business included:

• Repealed Prevailing Wage in Livingston County• Passed legislation prohibiting union

organizing classes at Michigan universities• Took local prevailing wage pre-emption

legislation to the Michigan Supreme Court• Passed a landmark law creating more

flexibility in schools so students can pursue CTE and vocational classes

• Had the most successful PAC fund raising year in our history

• Grew the Michigan Construction Jobs Center web site

• Represented the Merit Shop with statewide media including ABC, CBS, NBC and FOX television and radio affiliates, the Detroit

reportreportA N N U A L

The YeAr iN reviewA Look at How ABC of Michigan Fought for Your Business in 2014

association’s work in 2014 was driven by the General Election in November, since maintaining the Merit Shop momentum of the past four years was a critical element

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SPRING 2014 1

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• Launched a partnership with MIOSHA to enhance safety in the Michigan construction industry

• Prepared to launch the new ABC of Michigan Health Benefit Trust for ABC members

• Pushed for enactment of the Michigan Skilled Trades Training Fund

• Launched re-designed ABC of Michigan web site• Published & distributed comprehensive Voters Guide for the

November 2014 election• Worked to get ABC members appointed to the State Bureau

of Construction Codes• Redesigned the State Legislative Day and saw a record

number of members & legislators participating

Member BenefitsABC of Michigan’s top rated benefit is the Self Insured Workers

Compensation Fund. The Fund has returned over $22 million dollars in premium to subscribers since its inception in 1995. This past year the Fund returned over $2 million to its members. That represents an average of more than 36% return on premium for members. This one benefit alone more than pays the average annual dues for Fund members.

Businesses have seen a huge increase in their fuel expenses over the past several years, particularly if they own equipment as well as a fleet of vehicles. The ABC SuperFleet Discount Fuel Plan saves every participating member 5 cents a gallon on their fuel without an annual fee or minimum purchasing requirement.

For members who have fuel tanks or need equipment filled daily on-site (wet hosing) ABC has a Bulk Fuel Discount Plan. Fuel tankers come to you and your savings is 10% per gallon off margin. The program covers diesel fuel, dyed diesel and gasoline in bulk quantities.

In addition, ABC members can take advantage of many more discount programs at the national or local level.

Each quarter of the year ABC of Michigan produces its award winning magazine, Michigan Merit.

The publication covers important construction and business topics with informative articles and columns. It helps to communicate the truth about Merit Shop construction companies to our membership, our state legislature and others. Michigan Merit magazine is a great resource for our members and an excellent marketing tool for our industry.

Merit Minute is one of the best ways to get news to the full membership as quickly as possible and engage the full power of our nearly 1000 member companies almost immediately. With our communications efforts complemented by advocacy tools, ABC of Michigan responds to any Merit Shop issue presented in Lansing with accuracy and timeliness.

Each year the state office produces a Membership Directory covering members across the entire state. This directory is available both in a paper format and online using a mobile device or computer. Both formats feature a separate listing for each chapter with a buyer’s guide by specialty to make it simple to find a supplier or associate in each chapter area. It is a useful tool for companies that perform work in multiple areas of the state, allowing them to easily find other ABC member companies wherever their job is located.

In 2014 ABC of Michigan introduced its first ever construction-only jobs web site – MichiganConstructionJobCenter.com. The site assists member companies in finding new skilled staff members, and has already grown to be the first place many Merit Shop companies place their jobs and find their next great hire.

Premiering in 2015 will be the ABC of Michigan Health Benefit Trust – an employee health benefit resource for the construction industry that allows employers to be more competitive by lowering the payroll burden for prevailing wage and offering dollar banking for hourly field workers. MM

ABOVE: Gov. Rick Snyder (R) with ABC of Michigan leadership following signing of legislation to improve skilled trades options for students.

RIGHT: ABC members raise money for Make-A-Wish Foundation at an annual auction.


Senator arlan Meekhof

New Senate MajorityLeaderArlanB.Meekhof(R-West Olive) is nostranger to AssociatedBuildersandContractorsof Michigan. Sen.Meekhof’s legislativepriorities have alignedwith ABC’s many timesinthepast,andmovingforward, his leadershipof the Senate promises

tohaveapositiveimpact.Sen.Meekhofwasfirstelectedtoservethe30thSenateDistrict

in November 2010 and assumed office in January 2011. Priorto being elected SenateMajority Leader, Sen.Meekhofwas themajorityfloorleaderfortheGOPSenatecaucus,whereheensuredthatlegislativeprioritieswouldmoveforward.Sen.MeekhofalsoservedfouryearsintheMichiganHouseofRepresentativesinthe89thDistrict from2007-2010.During that time,Sen.Meekhofwas selected to his first leadership post midway through hisfirstterm,andwaselevatedtothepositionofassistantleaderinJanuary2009.

HelivesinOliveTownshipwithhiswife,Barb.TheMeekhofshavethreeadultchildrenandtwograndchildren.

Michigan Merit (MM): Why did you run for office, and what are you most passionate about in your position?

Arlan Meekhof (AM):Likemanyofmycolleagues,IranforofficebecauseI wantedtohaveanimpactinmycommunity. Ibeganmy career inpolitics at the local level andmovedup tohigher office as I recognized that I want to be part of helpingtosolvebiggerchallenges,not just thosefacingtheresidentsofOttawaCounty,butofthestate,too.

MM: do you remember your first interaction with aBC? What impact has that had on your legislative efforts?

AM:IhavealongrelationshipwithABC.Iintroducedmyfirstbillrelatedtoprevailingwagein2007.ABChasbeenveryhelpful

prioritieswith

in communicating the needs of their members. My interestin reforming prevailing wage and in project labor agreementlegislationhasmademeanaturalallywithABC.

MM: of which legislative effort are you most proud?AM: Sponsoring and helping to pass Freedom to Work [in

2012] was my greatest accomplishment in the Senate. I heardfromsomanymenandwomenwhowerestrugglingtofindvalueintheirunionrepresentationandthatlegislationmadeitpossibleforaworkertoholdtheunionmoreaccountable.

MM: What do you believe is the single biggest issue facing Michigan now and what do you think is the best solution to that issue?

AM: There is not one specific issue that keeps me awake atnight. Instead, I am passionately focused on how we in stategovernmentcancontinuetoimproveupontheworkwe’vedoneover thepast fouryears.Michigan isbeginning to turnaroundandIwantMichigantocontinuetoimprove.IwantourstatetobeaplacewhereparentscanfeelconfidentthatMichiganisaplacewhere theirchildrenandgrandchildrencanoneday live,workandraiseafamily.

MM: What recommendations do you have to improve aBC members’ communication with legislators?

AM:Itsoundsobvious,buthearingfromaconstituentinmydistricthasthegreatestimpactwhenIamconsideringlegislation.I believe local voices have the biggest impact on electedrepresentatives. After all, I came to Lansing to represent theinterestsofmyneighborsand[thecommunitiesinmydistrict].ABC does a great job of connecting legislators with membersliving andworkingwithin their districts and forme, that localvoicehasatremendousimpactonhowIdomyjob.

MM: What are your top legislative priorities for 2015?AM: Energy reform and increased accessibility. Technology

makes it possible for us to harness energy from a variety ofsources.Weneedtoworkhardertocollect,storeandmakethatenergyavailabletoourcitizens.

Greater accountability for education dollars. Children andparents deserve quality schools that graduate students who are


readytoachievetheirfuturegoals.Weallagreethatmoneyspenton education is money well-spent, but we need to make sureschoolsarelivinguptotheexpectationsofparentsandstudents.

PrevailingwagereformisanissuethatIhavebeeninterestedinsinceIwasatownshipofficialanditisanissueIwanttopursuein2015.

Also, Iwould like towork togiveback toour taxpayers.Asour state begins to turn around,weneed to share that successwith ourcitizensbyreturningtheirhardearnedtaxdollarswhenpossible.

Representative Jim Tedder

Newly-elected StateRepresentative JimTedder (R-Clarkston)fillsthe43rdDistrictseatvacatedbyterm-limitedfellow RepublicanRep. Gail Haines(R-Waterford).The43rd

District contains partofWaterfordTownship,thecityofLakeAngelus,the village of Clarkston

cityandIndependenceTownship.AsabusinessmanJimhasservedthecommunityasamemberoftheClarkstonAreaChamberofCommerceforover10yearsandasaLecturertograduatebusinessstudentsthroughtheDepartmentofMarketingandManagementat Oakland University. Rep. Tedder is well versed in the MeritShopasaformerstaffmemberforABCNationalinWashington,D.C.PriortohiselectiontotheHouse,hewasanadministratorwithClarkstonCommunitySchoolsandheistheownerofJimTedderProductions,asmallbusinessbasedinClarkston.

LawmakerLawmakerG E T T O K N O W Y O U R

Rep.TedderandhiswifeNancyresideinClarkstonandhavethreeschool-agedchildren.

Michigan Merit (MM): Why did you run for office, and what are you most passionate about in your position?

JimTedder (JT): I havebeen a grassrootsRepublican activistfor 24 years, and an active member of many local politicalorganizations and precinct delegate. Timing and opportunityultimatelypromptedmetorunforoffice.Ifeltthatmybackgroundsin business, government relations, and education made me abalancedandqualifiedcandidate.Iammostpassionateabouttwoareas:promotingfreeenterpriseandimprovingeducation.

MM: do you remember your first interaction with aBC? What impact has that had on your legislative efforts?

JT: Yes, I vividly remember my first interaction with ABCNational,theorganizationthatofferedmemyfirstprofessionalworkexperience. I startedout asAssistantofPoliticalAction, [where I]helpedfundraiseandhostmeetandgreetsbetweenABCmembersand congressional leaders. Shortly thereafter, I was promotedtoManagerof State andLocalGovernmentAffairs, serving as theconduitbetweenABCnationalandmembershipacrossthecountry.Iconsidertheseexperiences foundational tomydevelopmentasagovernmentaffairsprofessional.PromotingtheMeritShopprinciplesservedtoreinforcemypreviouslyheldbeliefsonthelimitedrolethatgovernmentshouldplayinafreeenterprisesystem.

MM: of which legislative effort are you most proud?JT:Sincethisismyfirstelectiveoffice,Idonothaveaspecific

legislativeeffortthatIamproudestof.However,Ilookforwardto protecting recent legislative efforts that have put Michiganin competitive standing with other states. I was pleased to seeMichigan become the nation’s 24th right to work state. I alsoapplaudedpassageofHouseBills4465and4466,offeringgreaterflexibilityundertheMichiganMeritCurriculum.Iwouldliketobuildupontheseachievements.

(R-Waterford).District

Times may be tough. But therE's a brighter tomorrow.

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Contact us today for a free savings analysis, and we will show you how bright the upside of prevailing wagecan be.


MM: What do you believe is the single biggest issue facing Michigan now and what do you think is the best solution to that issue?

JT:Ibelievethatthesinglebiggestissuefacingourstateisthelackofadequateroadfunding.This isadifficult issuetotackleas the current lame duck legislature considers the possibilityof raising taxesduring adelicate timeof recovery in our state.I personally support Speaker Bolger’s plan that would dedicateall revenuegeneratedat thepumptoroadfunding. Ifpassed, Iwouldworktoguaranteethepreservationofadequateschoolaidfunding.[Editor’s note: Rep. Tedder answered these questions during December 2014].

MM: What recommendations do you have to improve aBC members’ communication with legislators?

JT:Lookingthroughthelensofanincomingfreshman,Isuggest

that members approach legislators with issues of importancebackedbydataandsupportingevidence.Personally,IwillrelyonthedatapresentedbygroupslikeABCtostrengthenmypositionsonissues.Ialsoencouragememberstoregularlyvisitand/ore-mailtheirlegislators,especiallythoseABCisideologicallyalignedwith.ThiswillhelpmembersofthelegislaturetomaintainapulseontheconcernsoftheABCmembershipandtoadvocateontheirbehalf.

MM: What are your top legislative priorities for 2015?JT: My top legislative priorities for 2015 include: improving

education by providing more educational options, includinggreateraccesstocareerandtechnicaleducation;fixingourroadsbyprioritizingspendingandrelyingontaxincreasesasanabsolutelast resort; and, removing structural barriers to free enterpriseincluding repeal of prevailing wage and other burdensomeregulations.MM

LawmakerLawmakerG E T T O K N O W Y O U R

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SUPREME COURT WILL HEAR ABC APPEAL ON LANSING PREVAILING WAGE

inLansingonMonday, aprevailingwageproject inAnnArbor

on Tuesday, and a project in Detroit on Wednesday may have

toalterhisorherpayandbenefitpackage three times in three

days.Michigan’sconstructionindustryworkforceismorehighly

compensatedthanmostothervocationsinthestate,butneither

Lansing’snorthestate’sprevailingwagemandatealignswiththese

alreadycompetitivemarketrates.A2013non-partisanAnderson

Economic Group study found that prevailing wage in the

educationsectoralonecosttaxpayersanadditional$2.25billion

overthepastdecadewithnocorrespondingbenefit.

“Prevailing wage ordinances, like other wage and benefit

issues,areproperlyunderthepurviewofthestate,notthe1,800-

plus local units of government that can come up with 1,800

inconsistentsetsofrulestonavigate.Wetrustthataconsistently

applieddecision from theCourtwill settle this confusing issue

and bring about a level playing field that encourages growth,

opportunity and economic development statewide,”

notedFisher.

The Michigan Supreme Court has granted a leave for appeal

by Associated Builders and Contractors of Michigan (ABC), an

actionthatcouldleadtolocalprevailingwageordinancesbeing

invalidatedthroughoutthestate.

“Giventheconflictingcourtcasesoverthepastfewyears,we

agreewiththeSupremeCourtthatthe legalityofexcessiveand

expensivelocalprevailingwageschemesneedstobetakenunder

review,”saidChrisFisher,ABCofMichiganPresident.“Webelieve

astrongcasewillbemadethatthesemandatesareillegal,andthat

theSupremeCourtwillultimatelyruleonthesideofMichigan

taxpayers.”

Prevailing wage mandates create a hodgepodge of wage and

benefit classifications and payment schedules that exist only

for taxpayer-funded construction. ABC and others have long

maintained that these government construction schemes are

complicated, costly, and create an administrative burden.

Acontractorworkingonaprevailingwageproject

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OnDec.12,2014,theNationalLaborRelationsBoard(NLRB)issued its long-awaitedfinal rule that overhauls theproceduresforunionrepresentationelections.Underthiscontroversialrule,theamountoftimebetweenwhenaunionfilesarepresentationpetition and an election takes place likely will dramatically bereduced from the current average of 38 days. The changes arecurrently scheduled to take effect on April 14, 2015, unless acourtorCongressblocksenforcementofthenewrule.

TheNLRBAchievedthisdrasticreductionintimeprimarilyby:• Combiningpre-andpost-electionappeals• Shortening pre- and post-hearing procedures (requiring

thatpre-electionhearingsbeginwithineightdaysandthatpost-electionhearingsbeheldwithin14daysof thefinaltallyofvotesintheelection)

• Limiting the types of issues an employer can raise at apre-election hearing (determining which employees are

‘AMBUSH’ RULE MOVES FORWARD: EMPLOYERS SHOULD SEEK LEGAL COUNSEL

consideredsupervisors,andwhichemployeesconstituteapotentialbargaining“unit”areno longerpermittedbeforetheelectiontakesplace)

• Reducing the amount of time an employer is allotted toprovidealistofeligiblevotersandincreasingtheamountofpersonalinformationthatmustbedisclosedtounions

The shortened time period for union elections will place apremium on rapid response by employers to union organizingactivity. Employers are encouraged to speak with their labor counsel now about putting in place a rapid response plan for management because they may not get a second chance to prepare for sudden union organizing activity.

In addition, ABC is considering a legal challenge to the rulein federal court, and will continue to keep members informedabout any legal challenges that deal with procedures for unionrepresentation.

“Theambushrulereleased[Dec.12,2014]bytheNLRBfurtherdemonstrates theBoard’s shift fromneutral arbiterof labor lawto cheerleader for big labor,” said ABC National Vice PresidentofGovernmentAffairsGeoffBurr.“ABCopposesthiserosionofworkplaceandprivacyrights,whichwillleadtotheunsoliciteddistribution of employees’ personal contact information anddrasticallyshortentheperiodoftimebetweenwhenapetitionisfiledandwhenarepresentationelection isheld.Thisruleaddsunnecessary pressure to employers and deprives employees ofvaluabletimeneededtomakeawell-informeddecisionandwewillcontinuetoleadthefightagainstambushelectionsthrougheveryavailableavenue.”


TheMichiganLegislature approvedaplan for increased road

funding in the early morning hours of Friday, December 19,

2014, that sends the issue to theMichiganpublic for a special

voteinMay2015.Theplancallsforanincreasedsalestax(from6

percentupto7percent),alongwithanincreasetoschoolbudgets

andaswitchinthefueltaxstructurealongwitharestorationof

theEarnedIncomeTaxCredit.

As the Legislature prepared to adjourn for the 2013-2014

legislativesessionpreparatory to reconvening in Januarywitha

newcropoflawmakers,outgoingterm-limitedquadrantleaders

inboththeHouseandSenatebargainedandattemptedtowork

outthedifferencesbetweencompetingHouseandSenateplans.

GovernorRickSnyder(R)hasmaderoadfundingacenterpieceof

hislegislativeprioritiesandpushedbothchambershardtoiron

outaplanbeforetheendoftheyear.

While the whole road funding package was made up of

two resolutions and 11 bills, the final vote on the sales tax

increasereceiveda94-16approvalintheHouseand26-11in

theSenate. SomeHousememberswhovotednoon thatbill

expressed disappointment that the final plan included a tax

increase,whichwasnotpartof theoriginalHouse-approved

roadfundingbillsponsoredbySpeakerJaseBolger(R-Marshall)

which passed in early December. State Rep. Tom McMillin


(R-RochesterHills)wasvocalabouthisdisappointment,telling

reporters that failing to find cuts in the existing budget to

cover the needed funds for infrastructure improvements was

“Not outstanding. [It’s] sad.” House, Senate, and Executive

leadership all seemed supportive of the plan, with outgoing

SenateMajorityLeaderRandyRichardville(R-Monroe)noting

thattheplanofferedthepublicachancetobeinvolvedinthe

solution.

Becausethelegislature’splaninvolvesachangeinsalestax,it

requiresaconstitutionalamendment,whichmustbevotedonin

aspecialelectionbythepublic.Iftheamendmentfailstopass,the

Legislaturemuststartoverandworkoutanotherplantocomeup

withthenecessaryfunds.MM

LEGISLATURE APPROVES PLAN FOR INCREASED ROAD FUNDING, PUBLIC TO VOTE IN MAY 2015

The road funding plan calls for an increased sales tax (from 6 per-

cent up to 7 percent), along with an increase to school budgets and a switch in the fuel tax structure

along with a restoration of the Earned income Tax credit.


indexindexA D V E R T I S E R

ABCSelfInsuredWorkersCompensationFund...................... 32

AISEquipment........................................................................ 26

AndrewsHooperPavlik,PLC.................................................. 21

AnnArborFireProtection....................................................... 17

ArrowConcreteCutting............................................................ 9

ASHASafety............................................................................ 21

BaileyAgency.......................................................................... 13

BCTBenefitsPlan.................................................................... 25

BlackstarBuildingGroup........................................................... 5

Brigade FireProtection............................................................ 18

BrothersandBricks................................................................. 13

CapitalSteel&BuildersSupply................................................. 5

CDIConstruction.................................................................... 26

CommonwealthAssociates...................................................... 29

CriticalBusinessAnalysis........................................................ 21

CroweHorwathLLP................................................................ 11

DesaiNasrConsultingEngineers............................................. 27

DJMalteseConstructionLLC.................................................... 5

EfficientCraneSolutions......................................................... 16

EnterpriseFleet....................................................................... 27

ExcelElectric,Inc.................................................................... 13

FisherCompanies.................................................................... 26

Fonson,Inc.(GBMRecycledConcrete)................................... 17

G&GElectric............................................................................. 5

GarberChevrolet....................................................................... 9

GrandEquipmentCompany................................................... 21

GreatLakesIndustrialSupplyCo.,Inc.................................... 13

GreatLakesRoofing&InsulationSystems,Inc....................... 16

GreatLakesSafetyTrainingCenter.......................................... 18

GreatLakesStriping&Sealing................................................ 19

GuyHurleyBlaser................................................................... 14

HDSupplyWaterworks........................................................... 21

HeritageAutomall................................................................... 20

IndependenceCommercialConstruction,Inc.......................... 16

JacksonAssociates,Inc............................................................ 19

JBSContracting,Inc................................................................ 19

JGMMachineryMovers&Erectors,Inc.................................. 15

JimcoFireProtection............................................................... 13

JWFieldGrading&Excavating................................................ 9

K&SPlumbingCo.,Inc......................................................... 18

LaborReady,Inc...................................................................... 20

LighthouseInsuranceGroup................................................... 20

LiquidCalciumChlorideSales.................................................. 5

Loomis,Ewert,Parsley,Davis,Gotting,PC.............................. 29

MannConstruction................................................................. 21

MerloConstructionCo.,Inc.................................................... 26

MidMichiganMaterials,Inc.................................................... 16

PamarEnterprises.................................................................... 16

PlanteMoran........................................................................... 20

PMTechnologies..................................................................... 11

ProView(The Blue Book Building & Construction Network)........ 17

QualityAireSystems............................................................... 29

RapidFireProtection............................................................... 13

Rehmann................................................................................... 8

RockProducts......................................................................... 16

RWMercer.............................................................................. 11

ScheidelElectric...................................................................... 21

ScientificBrake&Equipment................................................. 21

SelleckArchitecturalSales....................................................... 27

SidingWorld............................................................................. 2

SummitElectric....................................................................... 21

Thermico,Inc.......................................................................... 14

TimpsonTransport,Inc............................................................. 5

TitanInteriors......................................................................... 26

TradesmenInternational.......................................................... 15

ValentiTrobecChandler.......................................................... 17

ValleyElectricalContractors.................................................... 21

WaltonAgency........................................................................ 13

WaterstoneInsuranceAgency.................................................. 18

WelchTile&MarbleCompany............................................... 27

Wm.MolnarRoofing,Inc........................................................ 20

X-CaliburSheetMetal............................................................. 16


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