Contact: Carl Gipson, Deputy Communications Director
(360) 956-3482

Open letter to media and Secretary of Transportation Doug MacDonald
RE: Secretary MacDonald's recent criticism of EFF's Transportation Solutions

Washington's Secretary of Transportation (DOT), Doug MacDonald, recently drafted a letter to the Evergreen Freedom Foundation criticizing our recommendations for solving traffic congestion. He sent the letter to media first. We found out about it from the Seattle Post-Intelligencer on January 8. We received an official copy in the mail one week later.

Secretary MacDonald had sharp words for us: ". . . we fail to understand why a modicum of fact-checking has not been done by the Foundation in preparing its materials." He took umbrage with two of our recommendations dealing with the cost of prevailing wage laws and the number of employees in our state's DOT.

Since factual accuracy is our bread and butter, we strive to produce consistently accurate analysis—and we continue to do so. But, knowing we are not perfect, we carefully examined Secretary MacDonald's accusations of inaccuracy.

We have concluded that what the Secretary calls "misstatements" are nothing of the sort. Here is our response.

How much does a flagger in Walla Walla really earn?
EFF has, on numerous occasions, pointed out that prevailing wage laws significantly and unnecessarily increase the cost of road projects. To illustrate the point, we mentioned that flaggers in Walla Walla County earn $23.11 per hour.

MacDonald claims this is incorrect, stating: "Flaggers don't receive $23.11 per hour in Walla Walla. The rate you quote is the all-inclusive cost to the employer including all fringe benefit costs. . . . The hourly salary actually paid to flaggers in Walla Walla County (before taxes and other payroll deductions) under the prevailing wage law is generally about $16.90 per hour, based on information we have from contractors."

It seems MacDonald is primarily concerned with semantics here. According to the Department of Labor and Industries, construction flaggers in Walla Walla do indeed earn $23.11 per hour in salary and benefits. That is the real cost to taxpayers for public construction projects. While their salary amounts to $16.90 per hour, the additional $6.21 per hour in benefits represents real value to the employee.

How much would taxpayers save if prevailing wage laws were eliminated?
Secretary MacDonald criticized EFF's recommendation that prevailing wage laws be eliminated, citing an audit conducted in 1999 on behalf of the Joint Legislative Audit Review Committee, which concluded that prevailing wage laws add less than half of one percent to the price of a project.

EFF was critical of the 1999 JLARC audit methods before the analysis was even completed because it was not a comprehensive performance audit. The state auditor's web site has more information on the characteristics of a comprehensive and independent performance audit (http://www.sao.wa.gov).

Our Foundation has reviewed many studies on the impact of prevailing wage laws throughout the nation and have found, unequivocally, that repealing prevailing wage laws significantly cuts construction expenses.

(1989 DOT Fiscal Note regarding prevailing wage)

How did performance audits help Michigan streamline its DOT workforce?
Secretary MacDonald disliked our comparison of Washington's DOT to that of Michigan, which has similar transportation infrastructure. We pointed out that Michigan, after two meaningful performance audits, was able to downsize its transportation workforce from 4,206 positions to 3,300. This means that Michigan (with a population of 10 million) has half as many transportation employees as Washington (with a population of 6 million). We suggested a similar streamlining here could eliminate 1,600 full-time positions in DOT, saving taxpayers more than $100 million each year.

In response, Secretary MacDonald made the claim that: "[Washington's DOT] maintains over 7,000 miles of interstate and state highways, plus a ferry system that carries more passengers in a year than use Sea-Tac Airport. MDOT, by contrast, operates no ferries and maintains just 2,350 or so miles of interstate and state highway. The remainder of MDOT's 9,000-mile highway system is maintained under maintenance contracts with counties and municipalities."

A simple call to Michigan's Department of Transportation confirmed that it manages 9,704 interstate and state highway miles, far more than the "2,350 or so" cited by MacDonald and significantly more than Washington's DOT manages.

How about those ferries?
The Secretary brings up an interesting point about ferries: Michigan's ferry system is managed through a partnership with the state DOT, public authorities and private companies. We have long advocated a similar plan for Washington's ferry system.

What will performance audits reveal?
Michigan's DOT underwent four separate comprehensive independent performance audits in 2002. By contrast, Washington's DOT has never undergone an independent performance audit by our elected state auditor.

Secretary MacDonald highlights findings from two of Michigan's performance audits to make the case that privatizing or outsourcing public projects is a bad idea. One finding states that the increased use of private consultants for engineering and testing on road projects means the state needs to improve its monitoring of those consultants. The second audit cited by MacDonald points out that MDOT did not have adequate oversight procedures to ensure that its contract maintenance program was efficient and effective and all contract requirements were being met.

Far from being a case against competitive outsourcing, these findings are a perfect illustration of the need for comprehensive performance audits. Michigan is now correcting those shortcomings in its transportation management. Washington's DOT has thus far refused to allow any meaningful reviews of its performance.

Furthermore, Secretary MacDonald failed to mention the conclusion of both of the Michigan audits he cites. The first: "We concluded that MDOT's project payment and finalization processes were generally effective and efficient." And the second: "We concluded that MDOT's oversight of state trunkline maintenance services were generally effective and efficient."

Why don't we identify our common ground and work together?
Despite these clearly mistaken criticisms, Secretary MacDonald has said numerous times that he and his department agree with many of our transportation recommendations. Realizing it is part of human nature to have differences of opinion, we don't expect to agree on everything. We would like to work with Washington's Department of Transportation where we have common ground.

As he publicly identified his differences with our work, we urge Secretary MacDonald to publicly identify which of our recommendations he agrees with so we can move forward together.

Sincerely,

Bob Williams
President
Evergreen Freedom Foundation

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org