Vermont Legislature SmartTranscripts:

[Rep. Marc Mihaly (Chair)]: Welcome back everyone to the House Committee on General and Housing, and it is 04/07/2026. The last matter that we're hearing today concerns three twenty eight, s three twenty eight, which is senate bill, housing bill, and we have two distinguished witnesses with us. Gentlemen, you want to introduce yourselves and take it away. Sure, David Mickenberg here on behalf of Working Vermont and

[David Mickenberg]: the Vermont Building Construction Trades Council.

[Marc G. P. S. Powell, Executive Director, VAC AFL-CIO]: And I'm Marc G. P. S. Powell, Executive Director of the VAC AFLCIO.

[David Mickenberg]: And just for some context as to why we're talking about labor issues in S-three 28, there was a provision that made it to the last day of markup in the Senate, and the chair had said, I'm advocating for labor provisions in the House. And so while the provision has shifted in focus, we're here to talk about the intersection between sort of construction

[Rep. Marc Mihaly (Chair)]: and the creation of things and labor. Was there, sorry for interrupting, we saw a number of things that disappeared between the Senate committee and the Senate has passed. Is that labor provision get out of the Senate committee or does it get up? Was the last provision that was taken out of the bill before it went to the floor. Okay.

[David Mickenberg]: And that was a provision I can mention in, I'm happy to talk about it. That was a provision which provided for a density bonus in building housing for projects over 45 units that were done with project labor agreements. And I don't know if you remember last year, we talked about projects, the labor agreements, which are agreements between labor and the builders for a set time and price of a project. It's commonly done, there's been one that's been done in the state of Vermont and it's the Addison Bridge insisted upon by the governor of New York at the time. That was

[Rep. Marc Mihaly (Chair)]: Was it a 20%, what was the bonus? 20% bonus, yeah.

[David Mickenberg]: So we'd be happy to talk about that. That's one of the things we wanted to mention, but also as we were thinking about this bill, the JP has been doing a lot of work with the treasurer's office, we realized and it sort of dawned on us through this process, we had been more focused on that piece, that piece came out and it dawned on us that right now the Treasury's Office is proposing to increase what is currently a $30,000,000 fund, is being used for helping to construct things. And so we wanted to just give a little background on the proposal that we thought would make sense for the committee to talk about. So about thirty years ago, almost to the day, Senator Vince Aluzzi was the chair of the Senate Institutions Committee and he got shepherded through until establishing Vermont's prevailing wage. It's an issue we talked about some last year, think there's something familiarity with it. With the state as sort of a large funder of construction work, it was felt that it's necessary to establish minimum labor standards for projects that were being done with state funds through the capital bill. That's the current one.

[Rep. Marc Mihaly (Chair)]: Yeah. Assume we know everything. Okay. Or assume we once knew everything, but it slipped out of our minds. So, if it's a state, the prevailing wage bill, your requirement that you're talking about is the one that requires that projects,

[David Mickenberg]: which state owns funds? State funds, so threshold of $100,000 but then the state funds through the capital bill is required to pay prevailing wage rates.

[Rep. Ashley Bartley (Vice Chair)]: We just had on the house floor today, third reading.

[Rep. Marc Mihaly (Chair)]: I thought this has been forever. What was all

[Rep. Ashley Bartley (Vice Chair)]: Oh, the capital bill.

[Rep. Marc Mihaly (Chair)]: Oh, the capital bill, yeah, and is this a requirement enshrined annually in the capital bill or is it It's in law. It's in law, okay. And it's 100 ks, the threshold is 100, is there anything about the project? Who owns the project?

[David Mickenberg]: No, it's either $100,000 or 2 and $50,000 if half of the money comes the state. But this is a law, and I provide some little background on this, this is a law that was very similar to federal Davis Bacon, which I think we talked about last year some, a law which was passed in 1931 to Republicans, Senator Bacon from New York and Senator Dates from Pennsylvania, which mandates that when you receive federal dollars, and in that case it's $2,000 so the threshold is $2,000 When you receive federal dollars, they are required to pay at a minimum Davis Bacon rates. In 2013, we in Vermont updated our preemptive wage law to add a percentage of the wages to account for benefits. Prior to that, there was no percentage for benefits, state's bacon provides for wages and benefits. And the idea is that these are sort of basic labor standards that should be set so that there's not a race to the bottom, and when the money is coming from state coffers, we have this ability require this basic level of minimum standards in these construction projects. Generally in the last thirty years, most construction projects in Vermont have been funded through the Capitol. But what we're starting to see is increasingly well intended initiatives to fund construction with state dollars outside of the Capitol bill. And I would say that the treasurer's 10% for Vermont is a very well intended initiative and it's the type of thing that we're starting to see. I'll just give by way of additional example, just today we were up in house ways and means reviewing the proposal to have money set aside or created for school construction. In the proposal, there is a provision that says that money that flows through school construction should be, there should be a requirement for prevailing wage dates that can, whichever is correct. So that's an example where that money would be flowing outside of the capital bill, but would still have the standards that we've set as a state included. So the standards that we're asking for just to be clear are pretty minimum standards In other states surrounding us, for instance, in the state of New York and the state of Massachusetts, their prevailing wage laws are tied directly to the negotiated rates by the units in those states. In Vermont, we set our rates differently through a wage survey done by the Bureau of Labor Statistics, which is available, I'm happy to show you that, it's available on the Vermont Department of Labor's website.

[Rep. Marc Mihaly (Chair)]: Are they very different?

[Rep. Joseph Parsons (Member)]: I'm sorry,

[Rep. Marc Mihaly (Chair)]: go ahead. In other words, forgive my ignorance, as on the ground rates we're talking about for Davis Bacon are the rates that we use at New York or whatever, are they very different?

[David Mickenberg]: The rates that are, yeah, the rates in Massachusetts and New York are higher. Yes. And this, yeah.

[Rep. Joseph Parsons (Member)]: How much?

[David Mickenberg]: Can see it's trade by trade, so it's hard to say, can send you the rate sheets and you can see, but it's meaningfully higher. And so think about, I think about it this way, sort of Vermont's rates are, you know, a good, you know, it's just like a basic level minimum wage for what we think construction workers on state funded projects should get.

[Rep. Marc Mihaly (Chair)]: Yes, go ahead. So you're getting questions, so if that's okay.

[Rep. Joseph Parsons (Member)]: Yeah, I have several. So I just looked up what Vermont's prevailing wage is, because I couldn't remember. And it says a base hourly rate plus a 42.5% fringe benefit component for state projects. What's that 42.5%? I'm confused

[Rep. Ashley Bartley (Vice Chair)]: by that.

[David Mickenberg]: Yeah, so the 42.5%, we didn't want it when I was mentioning 2013, that was quite a negotiation and that was to account for fringe benefits and fringe benefits are clearly defined in the statute. So you take, let's say you're getting $20 an hour, you would multiply that 42.5% and that would account for the fringe benefits. And how's How's vacation I don't know, vacations, things like that. So that's where the 42.5 percent, was negotiated among the various parties of Montana.

[Rep. Joseph Parsons (Member)]: Questions? Oh yeah.

[Rep. Marc Mihaly (Chair)]: So I just want to

[Rep. Joseph Parsons (Member)]: make sure I understand the proposal. You're saying anybody who utilizes the treasurer's 10% for Vermont must be paying prevailing wage. So what we've heard is that the 10% for Vermont is, it's not the full funding. It's just part of their capital capital stack. Stack. Often Often 1010% of of their their capital stack. It's minimal. I'd love to hear

[David Mickenberg]: what you're saying. Well, was just reading an article, I mean, $8,000,000 for one project, it's not, I didn't say minimal, that's a significant amount of money coming from state taxpayer dollars to a project, and that was just one project, so.

[Rep. Joseph Parsons (Member)]: I'm saying minimal in the sense of percentage, not dollar amount. Sure, yeah. So I'm just, so it would be, so if somebody, if my understanding of prevailing wage is correct, someone's a contractor for just one part of the project, now everyone's going to have to be paid prevailing wage, correct?

[David Mickenberg]: Yeah, everyone who's working on that project would be paid the prevailing rate.

[Rep. Joseph Parsons (Member)]: Do you have an idea of what the increased costs would be associated to that? Is that something that you could project?

[Marc G. P. S. Powell, Executive Director, VAC AFL-CIO]: I would just say that it may not be an increase across the board, there are, but because it's done by trades, there may be rates that are lower than

[Rep. Thomas “Tom” Charlton (Member)]: what they are now.

[David Mickenberg]: Well, I'll also mention that labor is only a small percentage of the project,

[Rep. Thomas “Tom” Charlton (Member)]: it's sucked. It depends on the project.

[David Mickenberg]: Well, the studies that we have that say it's somewhere between 2530% of the project, That doesn't seem at all. Well, if you're looking at the cost of the project and the increased cost of the project, I think there's a, I would say, I'm happy to provide all the studies, The idea that prevailing wage rates are automatically going to mean that projects are higher, I think we think it's a falsely machine. So for instance, we think having good wages and benefits for workers provides greater production, It provides a greater skill level. So we're talking about fewer change orders, number of studies that have shown so far.

[Rep. Joseph Parsons (Member)]: So I could agree and I could see where that could be accurate. I'm thinking of somebody who is seasonal, they wouldn't, or, you know, they only work if they're not eligible for benefits normally. Like if I'm paying someone to do construction and say this individual's not eligible for benefits, they're still getting paid well for the job that they're doing, but if they're then being paid prevailing wage, plus this 42.5%. That's the whole rate, not just, not, yeah. I mean, but that is an increase. And when we're talking about construction, a lot of times these individuals are seasonal, I just, I could see, I am concerned about what that means, again, for what is oftentimes not, it's part of the capital stack.

[Rep. Marc Mihaly (Chair)]: Similar to the capital build, it's not always funding the whole project, and we still apply the prepared free to the project. I do think it would be worth and then we'll get to you, Tom. I think both for this issue and for this committee, Mhmm. I think it would be good if you could provide us studies or other material that you have that get that goes to the question, which I gather is what it's been written about and thought about a lot, as to whether prevailing wage actually increases the cost of a project, and if it does, how it does and how it doesn't. This is an area I'd like to know more, and I think it would benefit the committee generally. Tom?

[Rep. Thomas “Tom” Charlton (Member)]: So, David's Bacon applies specifically to construction on the site, not to off-site construction.

[David Mickenberg]: Pretty sad.

[Rep. Thomas “Tom” Charlton (Member)]: What are you envisioning? Are you envisioning that we have a problem. We we have a program that we're considering with the CD and the treasury's office to do bulk purchasing of off-site constructed houses or the red the bulk reduction of price makes that available to smaller contractors. Are you envisioning that any portion of Vermont funds involved with that is also going to apply in SHOP because that's part of

[David Mickenberg]: the savings that we're looking at? Would that come out of this 10% for Vermont program and it would be purchasing off-site maybe pretty valuable. Okay.

[Rep. Thomas “Tom” Charlton (Member)]: Providing the financing for the production, like a construction loan, but the customer is the developer.

[David Mickenberg]: I guess I'd have to think about that. I mean, think the general question that we pose to you is if it's okay for funds to flow through the capital bill to have, why are we drawing a distinction between state dollars? One, flowing through the capital bill to appropriate thresholds, which you could apply here too, you could apply the same thresholds. What it's saying is the value for the last thirty years that we want certain labor rates to be set for capital to the profits. But if it's from a whole other part of the budget that has nothing to do with the capital bill, then all of a sudden those rates shouldn't apply. So I think I'd have to think about the off-site construction, but generally I would say if it's federal, if it's state dollars flowing too,

[Rep. Thomas “Tom” Charlton (Member)]: So what I'm thinking is that right now we need houses yesterday and we need to not be building nine of them,

[David Mickenberg]: if we can build 10. And when

[Rep. Thomas “Tom” Charlton (Member)]: the housing crisis is over, this is a different question. Yeah,

[David Mickenberg]: I would argue and I'm happy as you said, we don't think this, we want to build, we represent construction workers as well. We want to build also and I don't think they're building fewer houses in Massachusetts, New York, Connecticut, Rhode Island, every other state in New England because they have, in fact, not only prevailing wage laws, but prevailing wage laws that are prevailing wage rates that are higher than we have here. Building is happening there. And so we don't see this as a barrier, we see this as a positive.

[Rep. Thomas “Tom” Charlton (Member)]: The building in Massachusetts is more expensive than the labor model. Yeah, and sometimes It has a price tag.

[David Mickenberg]: Sure, and what we would say is sometimes that price tag, well, first of all, there's benefits to the price tag. For instance, many economic studies that show if you're paying workers more, that money floats into the economy. There's benefits: fewer people on SNAP benefits, fewer people on Medicaid, fewer people on the social safety net. So there's that type of research. And also what we would say is the union contractors that we represent, there may be a difference in profit margin that the owners face and we're okay with that. So maybe it costs, maybe people in Massachusetts get a slightly, the owners get a slightly smaller profit margin than they do other places. They're still getting a profit margin, otherwise they wouldn't be doing it.

[Rep. Joseph Parsons (Member)]: So, just to piggyback on what Tom said, would it possibly be the individuals that do the installation of those homes that might be?

[Rep. Thomas “Tom” Charlton (Member)]: Yeah, I mean there's a definite benefit to the workers and the economy. But there's still a different price tag at the other end when it comes to financing the construction and eventually the sale price of the home. And right now, average people in Vermont can't buy or build a home. So the timing, I understand the concept and I pay, voluntarily pay my workers over what would be data spaken anyway. But I don't know, it'd be harder to sell to the taxpayers than it would to the committee, I think, because we're a relatively high per capita tax burden state, and we know we need to build as many

[David Mickenberg]: homes as we can. Has already been taxed.

[Rep. Thomas “Tom” Charlton (Member)]: Well, where does it come from?

[David Mickenberg]: It comes from the people that are building the product. This is, you know, we're just setting the rates, we're not Oh,

[Rep. Thomas “Tom” Charlton (Member)]: yeah, okay. But they have to if it affects the overall cost of the project, it has to be financed, it has to be built into the price, it has to pencil out. So it's a bigger number that has to pencil out at the other end. Right now, with with workforce shortages, this might actually help the workforce shortage. Mhmm. But I don't know that there's people in another state

[David Mickenberg]: wondering what they should do it for a job. It's not

[Rep. Thomas “Tom” Charlton (Member)]: like they're gonna be you know, the

[David Mickenberg]: whole country will get more for shortage. I don't think we're gonna break migrations.

[Rep. Thomas “Tom” Charlton (Member)]: That's not a Massachusetts if they're making more money out there.

[Marc G. P. S. Powell, Executive Director, VAC AFL-CIO]: I do wanna tie that in, you're talking about bringing more workers. This conversation is a result of, you folks have heard from the AFLCL housing trusts. Again, that's another entity, not in the state now that we're trying to attract. This is another avenue that if this were in place helps us get there. And that's about, again, and I've been using this and I don't know if it works as great as I think it's us, but I keep saying, we've got five builders building houses now in Vermont, I've got a six and I'm trying to get him to come in and I can't get, I'm trying to find an avenue for him to come in so that we can bring in more money and can bring in more people. And the discussions around the hit have reached a point where frankly, I think that we need your assistance to push folks to say, we're making a policy decision that we need to explore all avenues and we think that this is a great way to do it and to get it done, we think prevailing wage is the way to do it.

[Rep. Joseph Parsons (Member)]: Gayle, that's the question. So if this weren't to make it into the bill or that it didn't pass, then what happens?

[David Mickenberg]: Then, well, the projects would be funded with taxpayer dollars outside of the capital bill and there would be no labor standards attached to the or wage standards attached to the project. There's no wage standard then. Minimum wage. Alright. And you know, but I'm talking about for specifically for construction.

[Rep. Ashley Bartley (Vice Chair)]: And people can use the labor folks and do it if they want, but it's not a much.

[Rep. Marc Mihaly (Chair)]: Some may, totally. I thought it might be. The rates are different. You don't have to have the PLA, the Project Labor Agreement, you don't have to be a union. It just means it's a way for states like Vermont, which are not heavily unionized, it's a way of having some of the benefits of unionization flow to the workers. If you require, for example, when the cap of the state builds something, you require a project labor agreement from everybody. Like what Tom was talking about. If you have a project labor agreement, that dictates the guts of what a union shop would demand in a negotiation. Okay. Not everything we I'm happy to send this to

[David Mickenberg]: the committee, just as part of my testimony, quoted from an article from the Cornell School of Industrial and Labor Relations, and they're talking about prevailing wage. If it's okay, just read it. Please

[Rep. Marc Mihaly (Chair)]: send something to us.

[David Mickenberg]: It says research has shown that compared to states with strong prevailing wage policy, states with weak or no prevailing wage laws are more likely to experience displacement of local workers by migratory, low wage and fully workers who are forced to put up with significant health safety violations while on the job. When local workers and companies are employed, researchers found that more projects remain circulating in the local economy. Prevailing wage laws provide important pathways to middle class for construction workers. Prevailing wage laws encourage skilled workers to enter the construction industry and incentivize firms to train workers, boosting productivity and lowering worker injury rates. Combined these benefits promote overall stability on a job site, which helps reduce total project costs. And finally, well paid construction workers are also significantly less likely to draw on essential public benefits such as SNAP and Medicaid to meet basic economic needs. So in the example that was used where someone who doesn't have health insurance, well, what do they do during that period of time when they're working? Oftentimes they'll be looking to other social programs, or they have

[Rep. Joseph Parsons (Member)]: an option. Or there was somebody else, I said they weren't eligible through their employer, there's a difference.

[David Mickenberg]: And so they could have had a bump.

[Rep. Joseph Parsons (Member)]: Correct, or there are multiple options that you have.

[Marc G. P. S. Powell, Executive Director, VAC AFL-CIO]: Anecdotally, so we're talking about essentially setting a floor for what workers are paying. Anecdotally, I'll just say, there was a project in Burlington working on a hotel. I got a call from the union saying, hey, how do we get in touch with DOL? There's been an issue there. They're paying folks to hang sheetrock and they're paying them by the piece they're hanging. So you put up, again, oh, you get another 30¢. Obviously that's completely illegal, I wanna just make that clear. But that's when we're talking about setting a floor, that will set a floor so that the companies that are paying workers well, aren't competing against the company that's paying somebody 30¢ for the piece of sheetrock to hang on. And when you put these standards in place, you're saying, we're not gonna pay illegally at 30¢ a piece of wood or whatever. This sets that floor and establishes those rates.

[Rep. Marc Mihaly (Chair)]: Yes.

[Rep. Joseph Parsons (Member)]: I'll just be upfront. This is not something I support. And I think we need to remember that this is something that we've already, you know, 2013, the capital bill, it's in there, that's great. However, I don't think we should connect this to 10% for Vermont, and here's why. Looking at eligible projects, and this is something we've talked about all session, traditional affordable housing, priority economic development projects supporting households between 65 to 120 AMI, smaller and emerging developers of smaller infill housing developments, home ownership development, manufactured housing communities. In the perfect world, we would not be using state funds to subsidize housing. I would love to live in a world. That's not the case because in Vermont, we have made building housing so difficult, so expensive that there has been a needed intervention from the state. And that's why we have the housing crisis that we do. I think it's very different having prevailing wages attached to the capital bill versus these housing projects. So that's where I'm at. Understand it, but it's not apples to apples here. It is apples to oranges, and it's a very different set up. It's different than a hotel. At the end of the day, if someone's paying you 30¢ per sheetrock, that's illegal. Prevailing wage is not gonna make that any more illegal. That still should be a call to the Department of Labor. The last thing I want to do is put anything into state statute that is going to make it harder for builders to build housing. That's just where I'm at. I have a question.

[Rep. Marc Mihaly (Chair)]: I should note the answer to this, but I don't think I do. I'm thinking of other situations where the state has evolved in housing, like VHCb. When VHCb contributes money to a housing project, do they condition them on everybody paying prevailing wage? Well, believe in most of those projects, they're receiving federal funds, Davis Bacon would apply. Would apply to the whole project? Yes. You get a

[David Mickenberg]: $2,000 federal funds.

[Rep. Marc Mihaly (Chair)]: Questions of these gentlemen, is

[David Mickenberg]: there more you want to say? No, I mean, that's the thrust of it. Mean, we don't see, first of all, we don't see prevailing wage rates as a barrier to doing any of this stuff. In fact, as you said, I think it could help with workforce shortages, which we hear about all the time, not having enough workforce, especially in the construction industry. So we don't see it as a barrier, and frankly, see it as a value as part of the state of Vermont. And now that we're seeing big chunks of money flowing outside of the capital bill for state construction, we just think it's, frankly, it's almost like a housekeeping and consistent with what we're doing otherwise. That's why we're having the same conversation on school construction. We desperately need school construction. And we think that if we're gonna be spending taxpayer dollars on school construction, that there should be some basic level minimum standards, which are what we have in capital statute, so we see it in the same vein.

[Rep. Marc Mihaly (Chair)]: I guess some things to think about. I'm not saying there aren't answers to these things, but I think it's worth your thinking about it. One is, in a way, this is not state money. It's state money that's lent out, but it's all paid back. In other words, this is a revolving, using our cash balance is a revolving fund. So, it's not like using state funds to build a school, say. Even if you borrow the money to build a school, let's say you issue bonds, you have to pay it back with taxpayer money and then so, so it really is state money. This is a situation where what we're doing is we're just being a bank in a way, just using our funds to loan out and it's all paid back, so it's not the same. I'm just trying to think of the arguments that you're going to hear. Elizabeth, do you have a question? And then I'll go with my last thought. Elizabeth?

[Rep. Joseph Parsons (Member)]: Thank you.

[Rep. Elizabeth Burrows (Member)]: I was just going to say that I apologize because I haven't heard of this before, and, that's my own ignorance. But, I'm it's gonna take me a little while to actually process all that you two have said. And if you could send us some documents that we could read through, I would really and Marc, if we could have them come back, I'd really love to have a second discussion over it because I need some time to actually think through all of it. Thanks.

[Rep. Marc Mihaly (Chair)]: Thank you. That's one reason I'm asking for more on prevailing wage because I think underneath, even if it's not about this particular proposal, it's really important. Particularly, JP, you were saying that in some possible trades, I think you said this just now, it could be the prevailing wage is a little lower than the wage that might be paid. But, anyway, here's the other thing that I think you should think about. This is not a situation, the current prevailing wage standard, it sort of has a nod of the head towards the differentiation between a project which is entirely funded by the state where if it's more than $100,000 of state money, you got to pay prevailing wage, but if it's only half from the state, the number's $2.50. It's sort of a nod, kind of a crude nod at, well, how much is the state really involved with this project? The problem here is the state may be not half, it may be 5% or 10% of the project. These projects have, as you know really well, complicated capital stacks and treasurer's contribution to a project could be five or 10% of the financing. So, the question then arises, well, how much of a mix really is there? You know, we're really gonna say to a project, Sure, we'll give you 10% of your money, but your whole project is prevailing wage. And that's a difference that you have to think about, particularly if and this goes back to whether prevailing rates really is thought, because if it adds cost, well then are you the whole point of this is that the reduction in interest rates, the write down of interest is a savings for the project. It might not be a lot, but it's some. And the problem is a prevailing wage adds more cost, then you're subsidizing with that little differential, then the whole program becomes kind of like what's the point? Can I read this sentence? Sure.

[David Mickenberg]: Just says any project authorized or funded in whole or part by the state of Vermont capital construction at which cost minimum. It's not like Well what's the $2.50? Well then it says, or construction project with a construction cost exceeding 200,050, if I misspoke, is authorized and is at least 50% funded by Capital Construction Act pursuant to statute. So that was when we were doing that, that was to account for municipal projects. I don't see

[Rep. Marc Mihaly (Chair)]: Right, but you see the issue, which is what happens if it's 10 of the product? 5% of the product. You're kind of leveraging there, and I think people are, I'm just bringing up issues that I know we're going to hear, that you should think about. Yes?

[Rep. Joseph Parsons (Member)]: Maybe I should follow the capital bill a little bit more closely. Are there funds that are revolving funds? Or similar to I'm not sure about other capital.

[Rep. Marc Mihaly (Chair)]: It's usually just appropriated, I don't know. I'm not aware I know there have been some proposals, but certainly I think even a revolving loan fund, if

[David Mickenberg]: you're getting an $8,000,000 loan at lower rates than you otherwise would be getting in a commercial setting, then you are getting taxpayer dollars.

[Rep. Marc Mihaly (Chair)]: You are, but if it's a $500,000,000 project, it's not the same as the state going out and building a school. Sure.

[Rep. Joseph Parsons (Member)]: Sorry, can I just ask one and more then I'll be done? When you were in the Senate, did they take testimony from the treasurers, and do you know where the treasurer's department stands on this?

[David Mickenberg]: Treasurers' office, spoke to the treasurer, we didn't talk, we were focused on a different piece of this, on the piece that was taken out, so we weren't focused on this treasurer. When it sort of dawned on us that we'd been having conversations about the HIT fund and things like that, we realized, well, this is a $30,000,000 fund. We did talk to the Treasury for the Office last week. We're waiting to hear back from them about their thoughts on this. I to speak for them.

[Marc G. P. S. Powell, Executive Director, VAC AFL-CIO]: I would just add, we've been meeting with them and others multiple times a month for over a year on this subject. On the subject of AFL CIO housing trust investment, bringing them in, finding dollars, finding developers and that sort of thing. They've been in on those conversations.

[Rep. Joseph Parsons (Member)]: But they haven't commented on this specific

[Rep. Marc Mihaly (Chair)]: Not publicly.

[Rep. Thomas “Tom” Charlton (Member)]: No, not publicly.

[Marc G. P. S. Powell, Executive Director, VAC AFL-CIO]: If we don't want to speak to that,

[Rep. Marc Mihaly (Chair)]: sorry. If

[Rep. Thomas “Tom” Charlton (Member)]: they have all CIO as part of the funding stack, it would be perfectly legitimate for them to say, this is one of our criteria. They do say they do say can then decide if that is to their advantage or not. K. This does not put that discretion. It's take it or leave it for state month.

[Rep. Marc Mihaly (Chair)]: Well, no. The developer could always

[Rep. Thomas “Tom” Charlton (Member)]: say say no. Exactly. But part and this is my 30,000 foot view of one of the challenges I see with public housing in Vermont. If we have, say, a 100,000 let's say, a private developer can build a housing in a $400,000. If the state puts $200,000 in, but it raises the cost 600, and that is not just economic stimulus, it's it's top tier energy, it's this zoning, it's this priority, it's this hiring practice, and there are so many little add ons that at the end of the day, we're not financing housing, we're financing everything else via a housing project. And that's not what that 1% is for in the treasurer's proposal. It's for housing. And my my objection, and this is where I'm gonna stick until we get past the housing crisis, is we say we're spending money on housing, we're spending it on housing. If we wanna spend money on economic development, go down the hall to a different committee and see if they can find money for it. Well, I mean, right now, I can't Well, we're trying to make housing affordable, then we have state funded projects that are canceling because they're hitting $700,000 per single family unit. It's too big of a difference to just get the little incremental, incremental, incremental, incremental,

[David Mickenberg]: and

[Rep. Thomas “Tom” Charlton (Member)]: helping us solve the how

[David Mickenberg]: you are. I guess I would say, as I said previously, I would like to know what the profit margins are. Are they different? Are they different here? Penciling out also includes what the owner is going to make, what the developer is gonna make in the profit margin. I I

[Rep. Thomas “Tom” Charlton (Member)]: don't know that they're always the bad guys because

[David Mickenberg]: I'm not as good bad as guys.

[Rep. Thomas “Tom” Charlton (Member)]: You know, and and they have to account for all of the government money that comes in. It's additional administrative administrative burden. It's more engineering. It's more that the architects have to meet criteria. So there's all kinds, once you start adding criteria, it has, I don't know that the profit margin were privately funded and publicly funded is a whole lot different.

[David Mickenberg]: I'm talking about whether you're using a project which has set labor rates like this versus one which is open Yeah, market

[Rep. Thomas “Tom” Charlton (Member)]: well, what I'm saying is my issue isn't with labor rates only.

[David Mickenberg]: It's all

[Rep. Thomas “Tom” Charlton (Member)]: of the additional expectations that make it difficult for the state to address the problem at the volume we need to move it. So we're not talking, we're gonna own 30,000 housing units. Sure. In four or more years. So, we'd

[David Mickenberg]: love to build them. And

[Rep. Thomas “Tom” Charlton (Member)]: it's, if it works, so I would need to, I mean, I would love to see a breakdown of where all of the cost difference go, because we do know there is a difference in state funded federal, certainly once the federal money gets involved, everybody's, it just gets more complicated. I would love to see a real solid fiscal analysis of where all of that extra, what is it, what is driving it and what portion, maybe a lot of it's not labor, maybe it's other things. My resistance is just knowing that we're not building as many housing units as we need to, and I need to explain to people living in their cars why we're building eight units instead of 10. So, I, it's a, I'd say that I think the market right now

[David Mickenberg]: is in a pretty unique and hopefully not a permanent spot. And I would say, let's hope we're not building those 10 units on the back of workers that are being paid. I would hope not, I would hope not. And that's what this, since 1931, the federal government for the last thirty years, the state of Vermont has said, we don't want things built at a race to the bottom of what workers get bitten. I hope

[Rep. Thomas “Tom” Charlton (Member)]: that that

[David Mickenberg]: probably comes

[Rep. Marc Mihaly (Chair)]: Elizabeth, did you have Your hand is still up, is that because you have another comment? Do.

[Rep. Elizabeth Burrows (Member)]: I would like to say that I am adamantly against corporate welfare and that I would love to know what the if we don't use a prevailing wage and we have workers who are relying on state benefits, how how frequent that is and what the bottom line to our state is and how that shifts from our lending money to builders to actually the state's bottom line. Thanks.

[Rep. Marc Mihaly (Chair)]: Bob, I have a question about what was left on the floor in the senate. Yes.

[David Mickenberg]: Happy to talk about that.

[Rep. Marc Mihaly (Chair)]: Can we just talk about it a minute? One of the reasons that I'm interested in the 20% is because whatever the argument might be or might not be about the added cost of prevailing wage, this is one way of saying, hey, let's compensate. Compensate for it, we get more housing, and it helps compensate the builder if it costs more money. You know why it died?

[David Mickenberg]: Think, I don't know, I think there's a Was

[Rep. Marc Mihaly (Chair)]: this land use objections like?

[David Mickenberg]: No, we're at land use objections, I think there's also a misnomer that, again, the same one that we're hearing here. First of all, it was voluntary, so you would get a bonus of everything if you decided to do a project labor agreement, not forcing anyone. But there was some sense in the committee that what we're hearing here is somehow that would increase the cost of projects and it wouldn't pencil out. Now, I don't think if it's voluntary, matters. It's up to the developer to decide. So we're happy to revisit that language in this bill because if people want to, you know, projects done, and this was done under project labor, voluntary project labor agreements, which happen generally voluntary, not mandatory,

[Rep. Marc Mihaly (Chair)]: there's a reason that people do them, and they're not just union versus- So it was a sense perhaps that it was gonna increase cost more than the 20%, the benefit of I 20

[Rep. Ashley Bartley (Vice Chair)]: think that there's a concern you know, in this building that is debatable between people that things anything that increases costs while we're in a housing crisis, people are cautious of. Whether there's data or accuracy, the density bonuses aren't forced, so that's something someone can elect. But I think that there's just challenges in the political realities of this building right now, with someone playing guitar. Do you hear that? That, you know, so I think that it's a challenging narrative. And I mean, it's like anything, paid leave, how you treat your employees, whether it has benefit for retention and other things that can help. This is a similar conversation where, you know, one person might say this costs more and then someone says, well, it costs less in a different way. So I just, I think that it's a tricky conversation in the building right now. So it's probably why, you know, it hasn't persevered at this point. So I don't know. I think if you could get us that information, it sounds like there's some committee members who want to learn more about it and I'm not trying to wrap it up. Okay.

[Rep. Marc Mihaly (Chair)]: I think you're just getting, it's good, you're getting honest, you're getting in, you know, dialogue on this issue.

[Rep. Ashley Bartley (Vice Chair)]: It's not his first day.

[Rep. Marc Mihaly (Chair)]: Yeah, Tom, anything before we wrap up?

[Rep. Thomas “Tom” Charlton (Member)]: No, I would, let me add a little bit to what I was saying, just reflecting on what, Burrows shared. Mhmm. The savings to the state not having families on benefits would be part of that equation. I'm just looking at, for a carpenter, on our prevailing wage with benefits, be about $72,000 a year. That's about $10,000 over very medium income. It's for the individual, about $70,000 more. So whether or not that, depending on the size of their family, that might mean they have benefits, it might not. So there's a ton of variables which is why somebody else under their knees could, somebody in JFO maybe.

[David Mickenberg]: Yeah, I'm not an economist.

[Rep. Thomas “Tom” Charlton (Member)]: Yeah, it is, I mean the overall effect is the outstanding question. Well, it's not as straightforward as

[Rep. Ashley Bartley (Vice Chair)]: And there's reason to be cautious, people are cautious.

[Rep. Marc Mihaly (Chair)]: Thank you. Any final questions of these two? Would be more helpful.

[David Mickenberg]: What's that? Yeah, more time. Yeah, happy to send, yeah. Send you many studies.

[Rep. Marc Mihaly (Chair)]: Happy to send the What is yeah, okay, I'm kind of interested in the density bonus thing. Don't know

[Rep. Ashley Bartley (Vice Chair)]: if I it's liked that. I watched the Senate hearings on this bill and I've watched the discussion. That's something I like, but I get Okay.

[Rep. Marc Mihaly (Chair)]: I can see some negatives.

[Rep. Ashley Bartley (Vice Chair)]: Some negatives

[Rep. Marc Mihaly (Chair)]: for labor in the sense that we don't want to get into a situation where every time a PLA is required, we've to pay for it, but You know, with some benefit. Any questions? Last questions of these gentlemen?

[Rep. Ashley Bartley (Vice Chair)]: Thank you.

[Rep. Marc Mihaly (Chair)]: Guys, thank you so much. Thank you. We are done for the day, and tomorrow we are just confirming, can we meet at 09:15 for Chris Donnelly?

[Rep. Joseph Parsons (Member)]: Yes.

[Rep. Marc Mihaly (Chair)]: Okay. So 09:15 tomorrow. And anything else apart from anybody?

[Rep. Joseph Parsons (Member)]: No.

[Rep. Marc Mihaly (Chair)]: Okay, we are adjourned.