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The Honolulu Advertiser
Posted on: Tuesday, April 27, 2010

Lingle vetoes Hawaii residency rule for government construction jobs


By Gordon Y.K. Pang
Advertiser Staff Writer

A bill mandating that a majority of government construction jobs go to Hawai'i workers was vetoed by Gov. Linda Lingle yesterday.

Senate Bill 2840 requires 80 percent of workers on public works contracts and construction procurement projects be Hawai'i residents.

The near-unanimous support for the bill among legislators it passed the Senate 19-2, and the House 50-0 suggests they may try to overturn Lingle's decision as early as Thursday.

If it becomes law, the bill would be the first in the state to legislate residency requirements for government jobs.

Supporters of the "local jobs for local people" bill argued that contracting jobs are going to outsiders when the Hawai'i economy is struggling to pull out of a recession.

The bill would apply only to state and county work, not jobs receiving federal money.

Lingle said the bill would impose an ambiguous quota system that would make it unreasonably difficult for contractors to comply and would also require additional state and county workers to monitor and enforce.

Contractors not meeting the requirements would be subjected to sanctions including withholding of payment, temporary suspension of a contract, disbarment and suspension.

Lingle also reasoned that rather than create more jobs as has been touted, it would result in fewer jobs by increasing project costs.

"I support the creation of local jobs for local residents," Lingle said in her veto message. "However, this measure does not create jobs because it does not incentivize any new economic activity."

The governor noted that an array of contractors and construction industry representatives opposed the bill, among them the General Contractors Association, the Hawai'i Developers Council, the Building Industry Association, Associated Builders and Contractors-Hawai'i Chapter, Project Plus and Royal Contracting Co.

"I am persuaded by the objections of these organizations and contracting companies because they are the job creators," Lingle said.

But state Sen. Robert Bunda, D-22nd (North Shore, Wahiawā), lead author of the bill, said there's a growing effort both nationally and internationally to keep the awarding of contracts to local companies.

"Local jobs for local people means that money made in Hawai'i stays in Hawai'i, and that's a good thing," Bunda said in a comment to The Advertiser's editorial pages.

'OUT OF TOUCH'

Nat Kinney, director of organizing for District Council 50, the International Union of Painters and Allied Trades, pointed to work done by Mainland contractors on the roof of Aloha Stadium recently as the best example of what the bill would stop.

Millions of dollars in jobs that could have gone to Hawai'i construction workers were instead awarded to companies whose workers came primarily from Minnesota and Kentucky, Kinney said.

Lingle's explanation for vetoing the bill "makes me want to vomit," he said. "The governor is completely out of touch with the effects that this economic downturn has had on construction workers."

'COST-EFFECTIVE'

Lance Wilhelm, president of the Hawaii Developers Council and senior vice president for the Kiewit Building Group, applauded the veto.

"It's fair to say that in the middle of work (on a construction project), there are almost always more than 80 percent (local workers)," Wilhelm said. "It's just the most cost-effective way to do the work."

Bringing in outside workers often involves additional cost considerations such as housing, living allowance, transportation and other issues that don't come up when Hawai'i residents are hired, Wilhelm said.

"It all adds up," he said.

However, he said, there are times he would like the flexibility to hire from outside, especially in cases where he needs subcontractors and workers with specialties that might be difficult to find locally.

Wilhelm said workers come and go on construction jobs. One phase of a project might require more outside workers, while another may have more local employees, he said.