Associated Builders and Contractors Newsline Reports
Financially Strapped States Eye Repeal or Reform of Prevailing Wage Laws
February 21, 2003
In light of widespread and
severe state budget deficits, several states have been examining the
possibility of repeal, suspension, or a roll-back of their state prevailing
wage laws. In recent years, Florida, Michigan and Ohio have successfully cut costs as a
result of repealing or suspending their prevailing wage requirements.
In Ohio, for example, the Legislative
Budget Office reported in 2000 that exempting school construction and
renovation from the state's prevailing wage law resulted in decreases in costs
with "no problems with construction quality." In light of the
positive results seen in Ohio, many states are hoping to offset
their current budgetary shortfalls by limiting or suspending their prevailing
wage requirements.
In Texas, a group of state legislators
believes that it is possible to cut as much as $4 billion from the state's
budget. A major part of this plan, which they hope to introduce this session,
requires repeal of Texas' prevailing wage law—a move that
they believe would save the state 10 percent to 15 percent in construction
costs.
Massachusetts Governor Mitt
Romney (R) also has expressed a desire to cut costs on construction projects.
Romney is said to be considering revising the state's prevailing wage law in
the hopes of cutting costs. In essence, his proposed changes would eliminate
prevailing wage requirements on projects costing less than $100,000 and in
communities with less than 5,000 residents.
ABC's six Pennsylvania chapters, known as ABC PA, are
attacking the state's prevailing wage laws on a number of fronts. Currently,
they are advocating a local option law for school construction. If successfully
passed, communities would have to opt-in to the state's prevailing wage laws
for school construction. ABC PA is also working to increase the threshold for
prevailing wages and attempting to legislate a remedy
for a 2002 Pennsylvania Supreme Court decision that required prevailing wages
to be paid on private projects covered in part by tax incremental financing.
Prior to the decision, these private projects were not subjected to the state's
prevailing wage laws.
In Connecticut, ABC Director of Legal and
Regulatory Affairs Anita Drummond testified February 11 before the labor
committees of the Connecticut House of Representatives and Senate. Drummond
urged lawmakers to consider reforming or repealing the state's prevailing wage
law in light of budget shortfalls. "A serious debate about the costs
associated with the current prevailing wage law and about necessary reforms is
the most responsible approach given the state's budget shortfalls,"
Drummond said. "By allowing the public to buy affordable, quality
construction, resources can be applied to more pressing public needs."
ABC chapters in California,
Delaware, Missouri and West Virginia also are working with their legislators in
the hopes of drafting prevailing wage reform or repeal legislation to be
introduced this year.
"This appears to be an
opportune time to pursue real changes and reforms to prevailing wage laws
across the country," said ABC President and CEO Kirk Pickerel. "It is
our hope that momentum on the state level will filter up to the federal level
and bolster the argument that federal Davis-Bacon is an unfair and expensive
unfunded mandate on states."
For more information, or to
raise this issue in your state, contact Geoff Burr at ABC, (703) 812-2081, burr@abc.org.