News Newsletter July 2010 A Word from the Chair: A Stronger Voice for Electrical Contractors
A Word from the Chair: A Stronger Voice for Electrical Contractors
Written by Pat Vlaminck
The best tool we can give to MEA's lobbyist, Bill Strusinski, is our explanation to our senator, representative and governor about how a proposed law will affect our business. Thank you to all members who took the time to make our collective voice heard.
The legislature is taking $1.5M out of the Construction Codes & Licensing Division of MN DLI Special Revenue Fund and putting it into the State's General Fund. What many legislators do not realize is that this has caused a 10% reduction in the people qualified to process and provide inspections. If this continues, the long-term effects are delays in construction, which drives up the costs significantly at a time when the economy is hurting. It is important for our legislators to understand:
- Why shortage of qualified inspectors causes delays and how these delays back up the work of many other workers in various trades on the job site. Same-day inspections are necessary on many projects before walls can safely be closed, equipment can safely be turned on, and more.
- Reduced staffing resulting in slower processing of licenses and registrations means that qualified people cannot work on a job site without their license. Contractors have to close their businesses until they receive their licenses. This can slow or stop a project in mid-construction.
- Reduced enforcement staff means that unqualified people will be working, causing an increased likelihood of accidents that can harm workers or the public.
- Overworking remaining staff lowers employee morale and productivity and increases burn out.
- Taking this $1.5M is really a 6% tax on licensing and inspection fees. This is a significant cost for the consumer who paid for permit fees in order to assure prompt inspections at their home or business.
MEA worked with others in the industry to implement a one year permit surcharge fee increase to fund inspections and enforcement so a task force of people in the industry and at CCLD can come up with a permanent solution. In the meantime, while we understand the challenges the state has in balancing the budget, we all need to help our senators, representatives, and governor understand the problems being caused by the $1.5 million transfer.
Sales tax was NOT added to construction labor this year but, with the projection of large deficits for 2011, it will be on the agenda again. We need to explain to legislators that sales tax on labor would be devastating:
- Additional Paperwork—Many small companies would be overwhelmed by the time and cost of processing the collection, filing, and payment of the sales tax.
- Your business can be closed—If sales tax is not promptly and correctly paid, the Dept. of Revenue has the authority to physically lock the doors to your business.
- Costs—Sales tax will need to be paid whether you collect the money or not.
- Reduced size and number of projects—Sales tax on construction labor will further reduce current construction levels, which have been severely hurt by the economic recession.
- Small business owners cannot pass on additional costs to customers who are already stretched thin by the current economic downturn.
Together, we can make MEA more effective by taking a few minutes to place a call, write a letter or send an e-mail. If possible, it is an excellent idea to help the candidate of your choice get elected by helping with door knocking, stuffing envelopes, making calls or donating money. Please remember that every dollar we spend with MEA gives us double value—what we purchased—PLUS stronger representation for our industry.
Thank you and I hope you have an enjoyable and successful summer. —Pat Vlaminck
P.S. It will be helpful to you and CCLD if we complete our CE and submit our registration and/or license renewals 60 days before our renewal deadline. More than 5000 electricians will need to renew toward the end of 2010, and this is only a small part of the total number of licenses that will come due at this time.
