Short answer: It's a bait-and-switch. Don't bite.
Longer answer: Contracting is a business. I was in it for almost twenty years. It's fine if you know how to negotiate contracts, are willing to take the risks, and value the independence. But going into business for yourself -- which is what you're doing when you accept a contract -- only because an employer is too cheap to pay you for a regular job is a mistake. Add the fact that the employer didn't tell you that till after the interview, and it's a thoroughly dubious prospect.
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A libertarian's dream: a robot that goes around repealing ordinances.
Short answer: It's a bait-and-switch. Don't bite.
Longer answer: Contracting is a business. I was in it for almost twenty years. It's fine if you know how to negotiate contracts, are willing to take the risks, and value the independence. But going into business for yourself -- which is what you're doing when you accept a contract -- only because an employer is too cheap to pay you for a regular job is a mistake. Add the fact that the employer didn't tell you that till after the interview, and it's a thoroughly dubious prospect.