McClaughry: How government expands, and liberty contracts

By John McClaughry

A bill making its way through the Vermont Legislature offers yet another example of government’s steady march toward regulating more of our economy and our lives.

The bill (H.157) aims to establish state control over contractors who do residential construction. The bill’s lead sponsor is Rep. Scott Campbell, D-St. Johnsbury. On April 6 the House advanced the bill on a vote of 97 to 52 and sent it to the Senate.

In March 2019, first-term Rep. Campbell, whose business career includes 22 years building and weatherizing housing, introduced a bill (H.534) to “create an enforcement mechanism for building energy standards, create minimum competency requirements for building contractors” and “create a building general contractor licensing system.” However, it received no consideration.

John McClaughry

John McClaughry is vice president of the Ethan Allen Institute.

Meanwhile, in April 2019 the Senate passed a public health bill of which mandatory contractor registration was a part, but the House failed to act on it.

This year, reelected, Rep. Campbell introduced his current bill. It contains the mandatory contractor registration requirements from the Senate-passed bill: any contractor must register with the Office of Professional Regulation (OPR) before contracting for more than $3,500 to undertake every imaginable variety of residential construction.

The requirement stops short of full-bore licensing, but the contractor has to give proof of liability insurance, have written contracts with customers, manage down payments acceptably, and comply with other similar provisions.

Failure to register becomes an “unauthorized practice” subject to a civil penalty. The contractor faces disciplinary action for “unprofessional conduct,” each violation carrying a civil fine of up to $5,000. The bill gives OPR two new employees, one for managing the registration paperwork and one for enforcing against alleged violators. Total cost: $200,000 per year, raised by fees ultimately paid by the contractor’s customers.

Many of the unprofessional conduct prohibitions are, to be sure, not unreasonable on their face. The OPR promises to use a “light touch” in carrying out its duties under the bill. But there’s a new finding in Rep. Campbell’s bill that will undoubtedly influence how “light” a touch future OPR regulators employ.

That finding is that “improving energy performance is a key strategy for meeting the requirements of the Global Warming Solutions Act.” That’s the law, ardently championed by Rep. Campbell, that the Legislature passed over Gov. Scott’s veto last September.

Why is this a game changer? Because the OPR will come under steady pressure from the legislators who passed the GWSA, their lobby group allies, and the partisan secretary of state who supervises the Office, to use its powers to crack down on building contractors. They will be pressured if not required to build to energy conservation standards that will stiffen year by year, as required by the GWSA Climate Action Plan to emerge by the end of this year.

It’s not enough that the customer knows what he or she wants, and the contractor offers to provide it at an agreed price. It’s not enough that Better Business Bureaus, the experience of friends and neighbors, and online resources provide information about contractor competence and reliability.

The regulatory power of the state must be mobilized to entangle and control especially the small-scale local handyman and fixer-upper contractor, which means there will soon be fewer of them. As Rep. Marcia Martel, R-Waterford, told the House after voting no: “This bill just kills any chance of being a small caring contractor in your own community.”

In the bill’s defense, Rep. Campbell promises consumer protection against incorrectly done work. He states that “fears of compulsory licensing, bureaucratic exams of contractor competency, and blocking home sales until expensive work is done” are simply “groundless.”

Oh? Maybe he has forgotten that he himself sponsored two bills in the previous biennium: one to “create a building general contractor licensing system” with minimum competency requirements (H.534), and one to prohibit occupancy or marketable title for sale of a single family residence not certified to be in compliance with approved energy standards (H.719), which assuredly will be set forth in the coming GWSA Climate Action Plan.

Rep. Campbell, by all accounts an intelligent and well-meaning man, is on a mission to defeat climate change, and in particular to make sure no construction or even sales of single family homes can be allowed in Vermont without the approval of a state government controlled by people whose careers depend on making Vermont the Perfect Little Climate Conscious State. That mission has become so important to him that he can dismiss any dissenting predictions, no matter how well founded on legislation that he himself has sponsored, as “groundless.”

The larger issue is, what will become of Vermont and Vermonters when our every activity, our every transaction, comes under the reproving eye of a coercive state government determined to have its way?

John McClaughry is vice president of the Ethan Allen Institute.

Images courtesy of Public domain and John McClaughry
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8 thoughts on “McClaughry: How government expands, and liberty contracts

  1. Vermont has two sectors with large CO2 emissions, i.e., buildings and vehicles

    Buildings

    A state-wide building code, which would require new buildings to be highly sealed, highly insulated so they could easily be energy-surplus buildings, or be entirely off-the -grid. Denmark, Norway, Sweden, Finland, etc., have had such codes for at least a decade.

    Vermont should be replacing run-of-the-mill, old houses, with up-to-date, energy-surplus, off-the-grid, new houses, at a rate of at least 5,000 houses per year. There would be 150,000 such houses by 2050.

    Dabbling at weatherizing, at $10,000 per house, is politically attractive, but a gross waste of money. The goal should be energy conservation and high efficiency. Their combined effect would reduce CO2 at the least cost.

    Zero-Net-Energy and Energy-Surplus Buildings

    The best approach for New England is having buildings that are zero-net-energy, or even better, energy-surplus. It used to be difficult to build such buildings, but that is no longer the case.

    Such buildings would:

    – Have solar panels
    – Have batteries
    – Have a large hot water-storage tank
    – Have ground source heat pumps (they are efficient year-round)
    – Be highly insulated, with R-8, windows, R-8 doors, R-40 walls, R-60 roof, R-20 basement
    – Be highly sealed, with less than 0.6 air changes per hour, ACH, as measured with blower-door testing.
    – Have an air-to-air heat recovery unit to exhaust warm stale air and take in cold fresh air
    – Be able to be “off-the grid” with a standby generator, in case of multi-day periods of overcast weather and/or snow/ice on solar panels.

    The invested capital and subsidies, now wastefully going to RE that produces expensive grid-disturbing, electricity, should be going to such efficient buildings, i.e., put the cart behind the horse.

    However, Wall Street, Warren Buffett, and GMP love these tax credits and fast write-offs, while playing the GW mantras to the hill.

    Vehicles

    The world needs a gas-guzzler code, which would impose a fee on low-mileage vehicles.
    The more below 40-mpg, the higher would be the fee.
    Any vehicles with greater than 40-mpg, such as the 54-mpg Toyota Prius, would be exempt.

    “Break their will” RE folks would have everyone drive unaffordable EVs, that would not reduce much CO2 compared with efficient gasoline vehicles.

    On a lifetime, A-to-Z basis, with travel at 105,600 miles over 10 years, the CO2 emissions, based on the present New England grid CO2/kWh, would be:

    NISSAN Leaf S Plus, EV, compact SUV, no AWD, would emit 25.967 Mt, 246 g/mile
    TOYOTA Prius L Eco, 62 mpg, compact car, no AWD, would emit 26,490 Mt, 251 g/mile
    SUBARU Outback, 30 mpg, medium SUV, with AWD, would emit 43.015 Mt, 407 g/mile
    VT Light Duty Vehicle mix, 22.7 mpg, many with AWD or 4WD, would emit 56,315 Mt, 533 g/mile

    • Addition to above comment:

      Standard Weatherizing of Housing NOT Sufficient for Heat Pumps

      In 2017, about 2012 housing units were weatherized, for about $20 million, about $10,000/unit.
      CO2 reduction about 6 million lb/y, or 2716 Mt/y.

      Assuming the older houses would last another 30 years, the CO2 reduction cost would be $19.75 million/(2716 Mt/y x 30y) = $242/Mt, which is high. See URL, page 30
      https://legislature.vermont.gov/assets/Legislative-Reports/Annual-202be-report-final.pdf

      Because these units had an average fuel use reduction of 23%, does not mean they are out of energy-hog territory, i.e., they likely would still not be sufficiently energy-efficient for 100% space heating with ASHPs.

      The rate of weatherizing is far too slow, and not “deep” enough, for the CEP 63% goal of space heating of all buildings using only ASHPs. See table 5

      A new approach, hopefully not involving government and Efficiency Vermont, is needed.

      1) Entire neighborhoods, with old houses, would need to be leveled for replacement with modern Passivhaus buildings.
      2) A new statewide, enforced, building code is required. See URL.
      http://www.windtaskforce.org/profiles/blogs/cost-savings-of-air-source-heat-pumps-are-negative-in-vermont

      • Addition to above comment:

        Heat Pumps are Money Losers in my Vermont House (as they are in almost all people’s houses)

        My annual electricity consumption increased about 50% (the various taxes, fees, and surcharges also increased), after I installed three Mitsubishi, 24,000 Btu/h heat pumps, each with 2 heads; 2 in the living room, 1 in the kitchen, and 1 in each of 3 bedrooms.
        The heat pumps last about 15 years.

        They are used for heating and cooling my 35-y-old, well-sealed/well-insulated house. It has 2” of blueboard (R-10 vs <R-0.67 for 8” concrete) on the outside of the concrete foundation and under the basement slab which has saved me many thousands of heating dollars over the 35 years.
        The heat pumps displaced about 300 gallon of my normal space heating of about 1,000 gal
        Domestic hot water, DHW, heating, requires about 200 gallon

        My existing Viessmann propane system, 95%-efficient in condensing mode, is used on cold days, 15F or less, because heat pumps have low efficiencies, i.e., low Btu/kWh, at exactly the same time my house would need the most heat; a perverse situation, due to the laws of Physics 101!!

        The heat pumps would be slightly more efficient than electric resistance heaters at -10F, the Vermont HVAC design temperature. It would be extremely irrational to operate air source heat pumps, “cold-climate” or not, at such temperatures.

        I have had no energy cost savings, because of high household electric rates, augmented with taxes, fees and surcharges. Vermont forcing, with subsidies, the addition of expensive RE electricity to the mix, would make matters worse!!

        Amortizing the $24,000 turnkey capital cost at 3.5%/y for 15 years costs about $2,059/y; I am losing money.

        There likely will be service calls and parts for the heat pumps, as the years go by, in addition to annual service calls and parts for the existing propane system; I am losing more money.
        https://www.myamortizationchart.com

        NOTE:
        If I had a highly sealed, highly insulated house, with the same efficient propane heating system, my house would use very little energy for heating.
        If I would install heat pumps* and would operate the propane system on only the coldest days, I likely would have energy cost savings.
        However, those annual energy cost savings would be overwhelmed by the annual amortizing cost, i.e., I would still be losing money, if amortizing were considered.

        * I likely would need 3 units at 18,000 Btu/h, at a lesser turnkey capital cost. Their output, very-inefficiently produced, would be about 27,000 Btu/h at -10F, the Vermont HVAC design temperature.

        NOTE: VT-DPS found, after a survey of 77 heat pumps installed in Vermont houses (turnkey cost for a one-head HP system is about $4,500), the annual energy cost savings were, on average, $200, but the annual amortizing costs turned that gain into a loss of $200, i.e., on average, these houses were unsuitable for heat pumps, and the owners were losing money.
        http://www.windtaskforce.org/profiles/blogs/cost-savings-of-air-source-heat-pumps-are-negative-in-vermont

  2. This will do nothing to protect against bad contractors. If we had a functioning court system there might be some justice in Vermont. We have no functioning court, we have no justice. Criminal run rampant in our state, they run our state! eB5?

    EB5 highly regulated.
    Eb5 biggest crime in nation
    Eb5 getting swept under the rug.
    Eb5 biggest scandal in nation, huge burden and blemish paid for by Vermont Citizens.
    Eb5 who won? Attorneys and public officials and the regulators.

  3. “When you have selfish and ignorant citizens, you get selfish and arrogant politicians.” George Carlin. The problem lies with the public, who are vapid and stupid. To put it another way, garbage in and garbage out.

  4. I have been a “small builder”….and am still today. My father was a “small builder”. Raised and educated a family of 5 kids that way.

    SMALL BUILDERS are a very large and able group of people who these knothead pussy legislators who don’t know a hammer from a screw driver had better leave us alone if they know what’s good for them.

  5. There are existing safeguards for shoddy work, whether it be on your house, your car or any other specialty. This is the type of garbage that makes people jump the river and live free or die.

  6. Does anyone remember the significance of today’s date (April 19)? It is the anniversary of the “shot heard around the world”. It looks more and more like history may just repeat itself but the oppression and tyranny comes from within.

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