The cancellation of courses students need in order to graduate and the resignation of chancellor Keith Motley are the latest evidence of deepening fiscal woes at UMass Boston. As is so often the case, the root of the problem can be found in decisions made many years before the crisis made headlines.
A 2011 report from UMass Boston’s Strategic Planning Implementation Design Team laid out an ambitions vision for the university’s future, but it also included a caution. Rapid growth is expensive, the report warned, so executing the plan would require watching every dollar and finding efficiencies wherever possible.
Unfortunately, the campus didn’t heed that warning when it came to its building plans. A year earlier, the UMass Building Authority had approved a 10-year master plan for $750 million in construction that included a caveat destined to increase construction costs.
The UMass Boston master plan included a project labor agreement, which requires that unions be the “sole and exclusive” source of jobsite labor for all construction. Encouraging unions to participate is one thing, but stipulating only union labor effectively shuts the door to any open-shop, or nonunion, involvement.
According to US government data analyzed by unionstats.com, more than 80 percent of Massachusetts construction workers are not union members. You don’t have to be an economist to know that excluding most of the market translates to less competition, fewer bidders, and higher costs.
UMass and the administration of former governor Deval Patrick dismissed studies showing that PLAs and their union labor mandates increase costs. “PLAs do not cost any more money than an open-bid arrangement, and in fact are likely to present some cost savings,’’ an administration official told the Globe in 2010.
But the UMass Boston science center that was projected to cost $155 million came in $28 million over budget and two years behind schedule. A new classroom building was a year late and $17 million over budget.
Backers argue that these union-exclusive deals ensure “labor peace,” but that claim has also been oversold. Between 2001 and 2008, when PLAs where banned on federally funded construction, there is no record of a single project that was plagued by labor unrest.
Some favor PLAs because they say the agreements ensure that workers earn fair wages. But public construction projects like those at UMass are already covered by state and federal prevailing wage laws that guarantee union-scale wages for all workers, regardless of labor affiliation.
Sadly, the warnings included in the 2011 UMass Boston report have proved prescient. By the end of the current fiscal year, the campus could face a deficit of $30 million — almost the same amount as the science center cost overrun.
UMass Boston is one of the few places in the area where students of limited means can access quality higher education at an affordable price. More than two-thirds of its undergraduates receive financial aid.
Local and national studies have shown that the premium for excluding nonunion workers is at least 10 percent. This translates to spending an additional $75 million to execute the UMass Boston master plan.
UMass does a lot of things very well, but it should be accountable to ensure that ambitious plans are accompanied by appropriate fiscal controls.
The university should also leverage rigorous processes the Commonwealth has in place to screen out unqualified bidders on public projects. Once that’s done, the savings from fair and open competition among all qualified contractors could well eliminate the need for measures like cancelling key courses.Greg Beeman is president of Associated Builders and Contractors of Massachusetts.