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April 16, 2013 | By | Posted in Legislature

PA prevailing wage changes advance, despite union, Democratic objections

By Eric Boehm | PA Independent

HARRISBURG – A state House committee voted Tuesday to approve two bills that aim to chip away at a costly state mandate.

Prevailing wage laws are another front in the ongoing struggle between unions and governmental entities in Pennsylvania. The unions favor the law because it guarantees higher wages on publicly funded projects in the state, but groups representing local governments and school districts say the law burdens their budgets with unnecessary costs.

Rick Gray, mayor of Lancaster, said the prevailing wage rule has cost taxpayers in his city as much as $447,000 since 2009 on 21 different public works projects.

HAMMERING AWAY: Prevailing wage laws have hit local government budgets hard, and now Republican state lawmakers are looking to chip away at them.

HAMMERING AWAY: Prevailing wage laws have hit local government budgets hard, and now Republican state lawmakers are looking to chip away at them.

“This is not about Democrats versus Republicans,” Gray said during an event at the state Capitol on Monday calling for prevailing wage changes. “It is about taxpayer-funded projects and the ability for local governments to keep up with infrastructure upgrades.”

But on Tuesday, it was about Democrats versus Republicans.  The two bills were voted out of committee with straight party-line votes of 15-10.

Pennsylvania’s prevailing wage law has long been a target of local governments and school districts, which have to bear higher labor costs because of 1961 mandate.  The prevailing wage varies from county-to-county and for different types of work, but it typically runs between 20 percent and 50 percent higher than the average wage in the county.

All publicly funded construction projects costing more than $25,000 must use the prevailing wage.

But the two bills approved in committee Tuesday would ease the law’s restrictions.

The first would raise the threshold for projects to qualify for prevailing wage to $75,000 from the current $25,000. That threshold has not been updated since the law was first passed.

The second bill would exempt road maintenance projects from the prevailing wage requirements, though construction of new roads or a rebuilding of an existing road would still qualify.

Advocates of the measures said both would help local governments and school boards make ends meet during difficult economic times.

“The burdensome prevailing wage law has made it particularly difficult for schools and municipal governments to maximize a competitive bidding process to get the best deal for taxpayers,” state Rep. Mario Scavello, R-Monroe, said in a statement.

Unions fiercely defend the prevailing wage mandate because it ensures higher pay for their members on public projects. They also argue that it ensures contractors use their best workers on public projects, and that it benefits the middle class in a broad way by keeping wages higher.

The added expenses caused by the law are overblown because labor costs typically account for less than 20 percent of the total cost on a project, they also argue.

State Rep. Bill Keller, D-Philadelphia, minority chairman of the committee, said the bills were “an assault” on the working class people who would be working on those projects.

Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said the bill would help reduce local property tax burdens by reducing some costs for local governments.

He said there was no timetable for a vote on the bills by the full chamber.

Contact Boehm at Eric@PAIndependent.com and follow @PAIndependent on Twitter for more.

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Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com or at (717) 350-0963.

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