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Change in prevailing wage law may open door to new transportation funding

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Monday, Oct. 21, 2013, 5:00 p.m.
 

HARRISBURG — House Republican negotiators are trying to determine whether cutting the wages required on some state construction jobs could be the key to winning GOP support for a transportation funding package.

Republicans are leery of voting for the $2.2 billion to $2.4 billion plan that would raise money for roads, bridges and mass transit but could lead to higher gas taxes. Gov. Tom Corbett has called the plan a priority for his administration.

Rep. David Millard, sponsor of the so-called prevailing wage bill, on Monday said unions are divided on the idea and there's concern that as negotiators gain GOP votes they will lose Democrats'.

That's why Millard, R-Berwick, would like his bill to be considered independently of the transportation bill. The apparent linkage to transportation, however, has placed Millard's bill and two others on prevailing wage reform in the spotlight.

House Minority Leader Frank Dermody, D-Oakmont, “has no desire to change the existing law which protects the pay of workers who construct and maintain buildings and infrastructure all over the state,” said his spokesman, Bill Patton. “The work they do is critical. They should be paid fairly.”

Dave Thomas, chief counsel for House Speaker Sam Smith, R-Punxsutawney, told reporters last week that prevailing wage reform was critical to garnering Republican votes. Corbett is willing to support a bipartisan package with prevailing wage changes, said his spokesman Jay Pagni.

Millard's bill states that only public projects above $100,000 would be subject to the 1961 Prevailing Wage state law. The current floor is $25,000. Projects above the threshold in urban areas are typically subject to higher union rates even if they are nonunion projects. The wage rate varies from county to county.

The law is “a jacked-up, above-market, taxpayer ripoff,” said David Taylor, executive director of the Pennsylvania Manufacturers' Association. “It's a major cost-of-government issue.”

Rick Bloomingdale, president of the Pennsylvania AFL-CIO, said the transportation bill shouldn't be funded at the expense of labor.

“We shouldn't be trying to lower wages for workers,” he said. “We think transportation should be done on its own.”

Any changes to the law would apply to heavy construction, not the building trades, according to a statement from the Associated Pennsylvania Constructors, a trade group for road and bridge contractors.

Millard's bill applies broadly to state and local government projects. Negotiators appear to be focused on transportation projects.

According to PennDOT spokesman Rich Kirkpatrick, the state funded 17 projects of $100,000 or less last year. The total amount was $1.1 million. He could not provide local road figures.

Adjusting for inflation since 1961, the exemption under the prevailing wage law should cover projects less than $200,000, Millard said.

The Senate in June approved a $2.5 billion transportation bill, which could increase gas prices 25 cents per gallon over five years. The House to date has balked at approving a bill. Republicans control both chambers.

A federal law sets wages on all federally funded projects. The Davis-Bacon Act of 1931 sets a threshold of $2,500.

Bob Latham, vice president of the constructors' trade group, said PennDOT's projects over the past few years have been funded about 60 percent by the federal government and 40 percent by state government.

Brad Bumsted is state Capitol reporter for the Tribune-Review. He can be reached at 717-787-1405 or bbumsted@tribweb.com.

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