Worker-hungry contractors say rules limiting apprentice hires stymies business
Sean Teehan Connecticut officials have touted workforce development as key to the state's economic recovery from COVID-19, but some contractors say restrictions on apprenticeship hires is hurting their ability to bring on new employees, even as the industry faces a worker shortage.
The state Department of Consumer Protection imposes a so-called "hiring ratio" on contracting companies in electrical, plumbing and metal-working trades. The rule is a bit technical but it essentially requires contractors to have a certain number of licensed journeymen on staff for each apprentice they hire.
The ratio allows contractors to hire up to three apprentices on a 1:1 ratio. That means a company must have three licensed journeymen on staff if it wants three apprentices. It would need two journeymen for two apprentices.
After the first three hires, employers must abide by a 3:1 ratio. That means for each new apprentice, a company must have three additional journeymen.
So, a company with 12 licensed journeymen can only have six apprentices on staff.
The rule has support from labor unions and at least one Democratic state lawmaker who says it ensures less experienced and unlicensed workers are properly supervised. Supporters say the ratio also prevents contractors from hiring a large number of apprentices who can serve as cheaper labor compared to more experienced workers, some of whom belong to unions.
But Stillman Jordan, a vice president at Stratford-based Environmental Control LLC (ENCON), said the mandate places real-world burdens on his company’s ability to hire new workers.
ENCON installs and maintains heating, air conditioning and solar power systems for residential and commercial buildings. At any given time, the company has a backlog of five to 10 prospective apprentices who are ready to work, but can’t until ENCON hires enough journeymen. Apprentices typically start at between $16 and $19 per hour.
The ratio is forcing contractors to fiercely compete for more experienced tradespeople as the industry faces a worker shortage. Some companies are offering major perks including up to $10,000 signing bonuses, Jordan said, which is increasing the cost to do business and ultimately leading to higher prices for customers.
"We talk about the jobs crisis. I have high-paying jobs but can't hire people," Jordan said. "The reason we haven't hired people who want to work here is the hiring ratio."
Meantime, a Republican state lawmaker recently introduced a bill in the General Assembly that would ease the hiring ratio, something that has support from the business community.
Workforce development
Even though Connecticut’s economy has faltered amid the pandemic, demand for trade jobs remains strong.
For example, in Connecticut there are currently 700 open HVAC-technician positions and 3,200 available electrician jobs, according to data from Build Your Future, a nonprofit focused on recruiting workers to the trades.
Connecticut's apprentice-to-journeyman hiring ratio applies to companies in both of those specialties as well as plumbing, sprinkler-fitting and sheet-metal trades, said Russell Jarem, an attorney who represents employers for labor and employment law firm Jackson Lewis PC.
After companies hire their first three apprentices at the 1:1 ratio, they may apply for a waiver to continue hiring at that rate, Jarem said.
But contractors say the red tape is still stifling and it’s an issue they’ve been trying to reform for years. Lawmakers did respond in 2017 by tweaking the regulations and establishing a working group that meets regularly to discuss the industry’s challenges.
However, it’s not enough and the policy seems incongruent with the state's workforce-development goals, said Chris Fryxell, president of construction industry trade association Associated Builders and Contractors of Connecticut.
Gov. Ned Lamont has made workforce development a top priority, and even established a new unit within state government to oversee workforce strategies and programs.
"We don't believe states should be limiting how many apprentices contractors can hire," Fryxell said. "We need to bring young people into the industry, and the state's making it harder to do that."
State Rep. Tim Ackert (R-Coventry) said he recently filed a bill that would permanently set the hiring ratio at 1:1, which matches the ratio companies are allowed to have on an actual job site. He said the current hiring ratio harms workforce development in the state.
"I see young people going through trade schools, and then there are no jobs for them," said Ackert, a licensed electrical contractor who owns Coventry-based Ackert Electric LLC. "There are people who want to hire them, but they can't because there's a ratio."
Safety and training
Among the ratio’s supporters is the International Brotherhood of Electrical Workers (IBEW) Hartford chapter.
Chris Brown, training director of the Hartford Electricians Joint Apprenticeship and Training Committee and treasurer of IBEW's Hartford chapter, said the ratio requirements are an important safeguard against companies relying too much on inexperienced workers. Lifting them could make job sites more dangerous, and the job market less hospitable to higher-paid licensed workers with more experience, Brown said.
Further, Brown said, a cutout already exists in companies' ability to apply for a waiver.
"They should be required to show they really have that need [for a waiver]," Brown said. "I just don't see the need to change the ratio … and flood the market with too many apprentices."
State Sen. Julie Kushner (D-Danbury) chairs the General Assembly's Labor & Public Employees Committee and said the hiring ratio ensures apprentices receive adequate training. If a company has just a few licensed professionals training a large number of apprentices, they could receive subpar instruction.
"It's important that they're trained well so that when they do become licensed journeymen they're really well qualified to do the work," Kushner said. "It's really important to all of us, as consumers, that if we're going to license journeymen that they're well trained."
Kushner noted that the nationwide unemployment rate for journeymen is about 30%, which suggests that contractors already have a pool of experienced workers from which they can hire.
Jordan said easing the restrictions will help the state achieve its workforce-development goals.
"The challenge is when you're running a business, the pain gets to the point where we're going to struggle if we don't solve this," Jordan said.
Christopher Keating Gov. Ned Lamont will unveil his two-year budget Wednesday with a call for transportation improvements as he seeks to balance the books without major tax increases during an ongoing pandemic.
After the high-profile failure of electronic highway tolls, Lamont and the legislature are searching for ways to pay for fixing Connecticut’s aging transportation infrastructure. The state’s special transportation fund is facing a deficit of more than $60 million in the current fiscal year, and could face larger deficits in the future if moves are not made to shore up the fund.
Connecticut has joined a regional climate initiative with nearby states, but Lamont’s chief spokesman says that does not translate into an immediate gasoline tax hike.
“There is no gas tax increase proposal whatsoever,’' said spokesman Max Reiss. “Nowhere in our budget do you see a gas tax increase.’'
While opponents might argue that the climate initiative would eventually lead to gasoline hikes, Reiss said that is not what Lamont is proposing.
The multipronged budget covers everything from nursing home payments to dental care for prison inmates. From mayors and first selectmen to nonprofit providers, numerous advocates and lobbyists are seeking money this year because the economic slowdown from the coronavirus pandemic has hit hard. The need has increased sharply at food lines and other sites that are operated largely by nonprofits.
A wild card in the state’s transportation future is the amount of money that Connecticut might receive from President Joe Biden’s administration. No final deals have been reached on transportation as Biden and Congress are still negotiating on a $1.9 trillion stimulus package, which includes $20 billion for public transit like the Metro-North Commuter Railroad. Lawmakers said that negotiators are discussing $350 billion for state and local governments, and Connecticut traditionally receives about 1 percent of the total — meaning $3.5 billion if a deal is reached.
Lawmakers have raised questions over exactly what will happen after Lamont joined a multistate coalition to reduce greenhouse gas emissions . Connecticut has joined Massachusetts, Rhode Island and the District of Columbia in the Transportation and Climate Initiative Program that is designed to cut carbon emissions by at least 26% in the 10-year window from 2022 to 2032 in Connecticut. The initiative is a regional cap-and-trade plan to raise money to combat climate change by seeking wholesale reductions in motor vehicle pollution, which is the largest source of greenhouse gas emissions.
House Republican leader Vincent Candelora of North Branford notes that estimates for gasoline price increases related to the initiative have ranged from 5 cents to 17 cents to 32 cents per gallon, depending on the projection.
“It just tells you how dangerously vague that proposal is, and it’s probably why most of the New England states did not sign onto it,: Candelora said. “New York didn’t sign on. New Hampshire, Maine and Vermont have not signed on. I recall New Hampshire’s governor said he would not participate, and they don’t think it’s a good policy.”
For the first time in more than 30 years, the state House of Representatives and Senate will not be convening on budget day due to the ongoing pandemic. Lamont will deliver a prerecorded budget speech in the same way that he delivered the State of the State Address in January.
The governor will be trying to close budget deficits that have been projected at $1 billion in each of the next two years. But officials said those numbers could improve because of the torrid pace on Wall Street, where the Dow Jones, S & P 500, Nasdaq Composite index and Russell 2000 index of small-cap stocks on Monday all set new records. Wall Street’s performance is important to Connecticut’s budget because millionaires and billionaires in Fairfield County pay increased capital gains taxes when selling stocks at high prices.
Another component that could impact the budget would be an overall resolution for the state’s gambling future, including sports betting and iGaming that would include playing blackjack on cellphones and computers. House Speaker Matt Ritter of Hartford said that Lamont and the two tribes that operate Foxwoods Resort Casino and Mohegan Sun are still negotiating in an attempt to reach a deal that could provide millions of dollars for the state.
“We, in the legislature, are rooting for both of them to succeed and get there because this has been years in the making 1/4 u201a” Ritter said. “The pandemic is going to be gone soon, hopefully, and I think people will feel comfortable going to the casinos if they get vaccinated.”
After Lamont’s speech, lawmakers will begin tackling the best ways to improve the state’s special transportation fund. Millions of dollars pour into the fund from the state’s complicated, two-part gasoline tax. The first tax is a flat 25 cents per gallon that is charged at the pump. But Lamont notes that Connecticut motorists have been driving fewer miles due to the COVID-19 pandemic as many employees are working from home and not making the traditional commute that they made for years. As a result, fewer miles driven leads to fewer dollars for the state coffers.
The second part is a gross receipts tax that is based on the wholesale price of gasoline. But since gasoline prices have been lower than their peak from past years, the state is collecting fewer dollars than previously projected.
The gasoline tax had been projected to be relatively steady at about $500 million per year. But recent estimates have shown the projections to dip to $488 million in the current fiscal year and $475 million in the next fiscal year that starts July 1. State officials said the numbers are expected to dip in the long-term due to the increased use of electric cars, but others said that the vast majority of Connecticut motorists are still driving their traditional gasoline-fired cars.
With many workers staying at home and avoiding the daily commute to work, the money coming into the coffers is down sharply.
“No one was taking the trains, no one was taking the buses, and no one was driving their cars for the last year,” Reiss said. “The governor is open to any and all suggestions when it comes to transportation.”
Lamont’s budget keeps transportation program afloat through 2026 with new truck fee
Keith Phaneuf After watching in frustration as lawmakers ignored his tolls proposals the past two years, Gov. Ned Lamont has effectively shelved the question of how Connecticut will finance a long-term rebuild of its transportation infrastructure.
The two-year state budget Lamont proposed Wednesday includes a new highway mileage fee on trucks and includes Connecticut in a regional initiative to control greenhouse gases by changing transportation policy — a program that also would boost gasoline taxes.
If legislators approve these initiatives, the administration says, the budget’s Special Transportation Fund no longer is headed for insolvency in three or four years, and could be healthy longer than that.
But Lamont’s budget director, Melissa McCaw, stopped short of suggesting those measures are enough by themselves to finance a two- or three-decade-long rebuild of Connecticut’s aging highways, bridges and rail lines.
For years Connecticut has relied chiefly on fuel tax receipts to support the Special Transportation Fund, which pays off the hundreds of millions of dollars the state borrows annually to fix its infrastructure.
“If the thinking had been, ‘If it ain’t broke, don’t fix it,’ then that thinking needs to change,” Lamont said during his budget address Wednesday, referring to the program’s flirtation with insolvency over the past seven years.
Although he is optimistic President Joe Biden’s new administration will significantly increase federal funding for transportation, Connecticut must have its own resources and be ready to move when Washington does, Lamont said.
The governor’s new plan includes nothing like the statewide tolling plan, which involved both cars and trucks, he pitched in 2019 with the goal of generating more than $600 million per year in new revenue.
Instead, his latest budget would create a highway usage fee on large trucks that is based on the vehicle’s size and miles traveled. It would target trucks in class sizes 6 through 13, charging between 2 and 10 cents per mile in most cases, but up to 17.5 cents in others, McCaw said.
The program would generate about $90 million per year, the administration estimates.
But the Motor Transport Association of Connecticut, the state’s largest coalition of trucking businesses, called the plan “discriminatory” and predicted it would be a financial flop.
“It is disheartening, but not surprising, that Governor Lamont has chosen to once again target the trucking industry to try to cover up the fiscal woes of the transportation fund,” MTAC executive director Joseph Sculley, who also opposed tolls, said of the latest plan. “The workers in an industry that he himself declared “essential” have been among the heroes of the COVID-19 pandemic, bringing vaccines, medications, hospital equipment, and groceries to locations all across the state.”
Sculley added that this burden largely will be paid by in-state businesses while many trucks from other regions will take new routes and avoid Connecticut altogether.
“Rather than targeting the industry, the Governor should simply thank truckers for their role in surviving the pandemic, and leave us alone,” he added.
Lamont isn’t only targeting large trucks, which he says do the “vast majority” of damage to state highways.
But the Motor Transport Association of Connecticut, the state’s largest coalition of trucking businesses, called the plan “discriminatory” and predicted it would be a financial flop.
“It is disheartening, but not surprising, that Governor Lamont has chosen to once again target the trucking industry to try to cover up the fiscal woes of the transportation fund,” MTAC executive director Joseph Sculley, who also opposed tolls, said of the latest plan. “The workers in an industry that he himself declared “essential” have been among the heroes of the COVID-19 pandemic, bringing vaccines, medications, hospital equipment, and groceries to locations all across the state.”
Sculley added that this burden largely will be paid by in-state businesses while many trucks from other regions will take new routes and avoid Connecticut altogether.
“Rather than targeting the industry, the Governor should simply thank truckers for their role in surviving the pandemic, and leave us alone,” he added.
Lamont isn’t only targeting large trucks, which he says do the “vast majority” of damage to state highways.
The governor also is counting on savings from Connecticut’s decision to join neighboring Massachusetts and Rhode Island in the regional Transportation Climate Initiative.
The program would raise taxes on fuel producers — which would be passed onto motorists at the pump — adding about 5 to 9 cents per gallon by 2023.
The administration estimates this would generate about $80 million per year. And while much of the revenue raised by those increases would be used by states to invest in public transit, electric cars and other conservation methods, that could free up other dollars in the Special Transportation Fund to support the capital program, McCaw said.
According to Lamont’s budget office, the fund currently is headed for insolvency by 2024 or 2025. But with these two initiatives, the fund would continue running a positive balance at least through 2026.
More importantly, McCaw said, if additional federal dollars are channeled to states for transportation, Connecticut could be in a very different situation. But whether that would be enough to eliminate the need for tolls or major gasoline tax hikes over the long haul remains unclear.
Don Shubert, president of the Connecticut Construction Industry Association, was cautious Wednesday about the governor’s proposal, saying legislators need to dig deeply into the numbers.
Connecticut has under-invested in transportation for years, Shubert, other transportation advocates, and many legislators have argued.
And while additional federal aid may be forthcoming, he said, legislators here need to iron out a vision for the future now, and not in 2022 or 2023, he said.
“You’re going to have to rebuild the industry’s confidence that there’s going to be long-term, stable, dependable funding in Connecticut,” Shubert said, adding that many construction firms and workers already are finding work on transportation projects in neighboring states. “It’s been two decades [that] we’ve been hanging on by our fingernails” he added.
Dan Haar: How Lamont will use federal money to avoid tax hikes
To balance a state budget for the coming year that’s $1.2 billion out of whack, Gov. Ned Lamont will use federal coronavirus stimulus money that hasn’t yet been adopted.
The Democratic governor will not raise broad-based taxes such as the sales tax, the personal income tax and the corporate earnings tax, following a path he has long signaled — despite pressure from the most liberal wing of the party.
Lamont will, however, build in modest revenue totals from four controversial sources when he unveils his plan for the two fiscal years that start July 1, at noon Wednesday: Higher taxes on the heaviest trucks driving through Connecticut; a wholesale gasoline levy for the regional transportation climate initiative, which could amount to a few cents per gallon; a take from sports betting and online gaming; and legalized, adult-use marijuana.
And he will rely on significant cost savings, not from cut programs but from efficiency — especially, sources said, some $150 million a year after an expected mass retirement of state employees on or before June 30, 2022, the result of a change in pension policy.
This broad outline for the state’s $22 billion annual spending plan was described to me and my colleague Ken Dixon by people who had been briefed on Lamont’s budget.
Many details were not available but, for example, it appears the taxes on trucks and gasoline amount to about $100 million a year. That’s large enough that we will hear howls from the same Republicans who have fought every proposal to shore up transportation revenues, such as tolls, even as those same Republicans also opposed cuts in spending to repair highways and bridges.
The big picture is clear: In an extraordinary pandemic year, Lamont faced a tough choice among four options.
He could propose a budget that didn’t balance, in hopes that federal stimulus money, future borrowing or an improving economy would bring in enough money to cover expenses. Governors have done that before, most notably former Gov. M. Jodi Rell in the depths of the Great Recession.
Lamont could propose broad tax increases and deep spending cuts to fill the budget holes caused by both the pandemic and the state’s rising debt and liabilities. He will pare some spending, less than the GOP wants to see. The highly unwise path of tax hikes is being pushed by progressive Democrats in a group of 30, including Robyn Porter, D-New Haven, who want sharply higher personal income taxes on wealthy people — not just to fill budget holes but to address the inequity of life in the 21st century gilded age.
Higher taxes would pay for needed services such as mental health and temporary income supports for people out of work in the forced recession, and could help the state address a long-term housing crisis, for example. But they would come at precisely the moment when millions of Americans are deciding where to reroute their lives as the pandemic ends.
Or, the governor could rely on the state’s emergency budget reserve, known as the rainy day fund, which is expected to reach $3.5 billion this year. That would require some financial razzmatazz, as the fund is supposed to be used for deficits after-the-fact, not budget planning.
Finally, Lamont could pitch a balanced budget by assuming Connecticut will receive hundreds of millions of dollars — perhaps billions — from a federal government controlled not just by Democrats, but Democrats with Connecticut’s interests at the top of mind. President Joe Biden and Rep. Rosa DeLauro, D-3, the powerful head of the U.S. House committee on spending, are talking about steering $350 billion to cities and states. That would translate to about $3.5 billion for Connecticut, much of which could go to the state with fewer strings attached than the $1.4 billion in 2020 pandemic aid.
Lamont chose the latter path, sources said Tuesday. But when we see the plan in full, it may contain elements of other options.
For example, Lamont will slice about $350 million off the budget shortfall by once again delaying the transfer of one-half of 1 percentage point of the state sale tax from the state to cities and towns. And those mayors and first selectmen might not whine quite so loudly if the federal bailout helps them, too.
It’s unclear how much federal stimulus money Lamont plans to use to balance the budget. And the calculus isn’t straightforward in the world of sophisticated financial engineering overseen by Melissa McCaw, Lamont’s highly secretive but well respected budget czar.
For example, in one tranche of federal pandemic stimulus dollars, Lamont will use some $443 million in the two years starting July 1 to boost education grants to cities and towns. Much of the money would be over and above the $2 billion a year the state now sends to cities and towns for school aid under a program known as education cost-sharing, or ECS.
But here’s where Lamont’s plan gets complicated: July 1 marks the start of the third year of a 10-year phase-in of a reformed ECS formula that increasingly favors lower-income, lower-performing school districts. Lamont and McCaw would suspend that phase-in and fill the gaps with the federal money, which, by the way, cities and towns need in order to educate kids in a pandemic.
So, does that amount to using federal money not yet authorized to balance a budget? My head hurts just thinking about that metaphysical question and we the people should not care. Bottom line: It’s Feds to the rescue in 2021.
And, sources said, Lamont will use other money from the not-yet-adopted federal stimulus for regular spending. I asked one person familiar with the plan whether that’s a worry — using one-time cash for recurring expenses — and the person said no, because we’re seeing a recovery from the recession that started, boom, with the coronavirus shutdown of March 2020.
As a case in point, Connecticut’s projected future-years revenue rose by more than $1 billion per year in the few weeks between early November, 2020, and Jan. 15 of this year.
Think about that for a minute. How did state budget planners miss by $1 billion in November? Consider, the increases were fairly evenly divided between the sales tax, the income tax on wages and the income tax on investments by the richest residents. In other words, it was the result of a recovering economy bolstered by an estimated $6 billion in federal aid that Connecticut received in 2020 — not just an ebullient Wall Street as Main Street struggled.
And more importantly, what will the next revenue forecast, due in April, show? If you talk to someone who claims to know, you are talking with either a comedian, a liar or a confident wild guesser. We have no history for a recession like this, friends.
Revenue from marijuana sales and online and sports betting is a bit of a gamble because the General Assembly has approved none of that and big hurdles remain. But the totals are not budget-breakers. Pot sales, for example, would yield $33 million in the second of the two budget yeas, a source told Dixon.
Here’s what we do know: Despite pressure from inside his own party, Lamont is absolutely right to avoid broad-based tax increases in 2021-22.
The truck tax is fine, it substitutes for the tolls on out-of-state drivers and interstate truckers we should have adopted in 2019. But as for income, sales and business taxes, this might be the one chance in our lives when Connecticut can actually attract large numbers of people in a single year, as the pandemic shifts people’s lives around.
Why put up a stop sign?
Likewise, despite what Republicans will say on Wednesday, Lamont is right to use one-time federal money to shore up state services in a crisis. And despite what unions will say, he’s right to use the retirement cliff of 2022 to save money long-term. The state still faces a massive, long-term liability crunch.
The Lamont budget is, in short, a case of governing from the middle. Like Bruce Springsteen said in his 2-minute ad that stole the Super Bowl, that’s a hard place to find but it’s where we need to be.