Prevailing Wage for Transportation Projects Should End, Some Republicans Say

By Eric Boehm | PA Independent

HARRISBURG – If the state is going to spend $1.8 billion on new roads and bridges, it should get the most bang for those big bucks.

That’s the argument some conservative Republicans in the state House are making with regard to Gov. Tom Corbett’s proposed transportation funding initiative.  They say they want to make changes to the state’s prevailing wage law to be included in the transportation funding package that the General Assembly is expected to work on during the spring.

Pennsylvania’s prevailing-wage law sets standard wages and benefits for all government-funded construction projects that cost more than $25,000.

The wages are determined on a county-by-county basis and vary widely across the state, but they generally result in wages at least 10 percent higher than on non-prevailing wage projects in the same area, according to data from local government groups.

Because the prevailing wage requires a premium that can drive up the cost of public projects, changes to the law should be considered to ensure taxpayers are getting as much as possible out of the new transportation funding plan, state Rep. Gordon Denlinger, R-Lancaster, said.

“If state government moves forward with a plan to fix roads and bridges through taxing more at the pump, we must work the spending side through enacting long-overdue reforms to the prevailing wage system,” Denlinger said.

Denlinger is the prime sponsor of legislation in the state House that would do away with the prevailing wage entirely. He said Friday that he will push for the inclusion of prevailing wage reforms in final transportation plan as well.

But Democrats and labor unions would oppose such changes and their inclusion could complicate the politics of passing the transportation plan this spring.

There is reason to think adding prevailing wage changes to the transportation package would complicate the legislative process for what could otherwise be a bipartisan deal on transportation funding.

In fact, it may have to be bipartisan, because there may not be enough of the majority Republicans willing to put up votes for the gasoline tax increase pitched by Corbett.

Bill Patton, spokesman for House Minority Leader Frank Dermody, D-Allegheny, said a Republican effort to link prevailing wage changes to the transportation package would be the “worst kind of mistake.”

“It would be almost impossible for Democrats and a good number of Republicans to support a bill that includes that kind of language,” Patton said.

Other opponents of prevailing-wage reforms point out that it would unnecessarily complicate the legislation without changing much — any state transportation projects funded with federal cash would be subject to federal prevailing-wage laws, enshrined in the Davis-Bacon Act, regardless of any changes the state might enact.

Lawmakers should take steps to protect every dollar of taxpayer investment, said Matthew Brouillette, president and CEO of the Commonwealth Foundation, a Harrisburg-based free market think tank that favors overhauling the prevailing-wage rules.

“Prevailing-wage reform should absolutely be included,” he said.  “And if it won’t have any impact, then why is there so much opposition to it?”

Labor unions oppose changes to the prevailing-wage laws because they ensure higher levels of pay for their members on public projects.  Unions also argue that prevailing-wage requirements ensure the most skilled laborers are used on public projects, making sure the taxpayers are getting the finest quality in exchange for the extra cost.

The Keystone Research Center, a liberal think tank in Harrisburg, argues that raising the wage threshold or eliminating it completely would result in a younger, less well-trained workforce making lower wages and benefits.

But that’s not a good argument against making changes to protect taxpayers, others say.

State Rep. Stephen Bloom, R-Cumberland, another advocate for overhauling the prevailing-wage law, dismissed the notion that it would make the transportation package more difficult to pass.

“The politics of the transportation plan are already complicated, but I don’t see why including common sense reforms to save taxpayers tens of millions of dollars on local road work would make it harder to pass,” he said. “If anything, prevailing wage reform and improved efficiency should strengthen grassroots support for the plan, especially from the many rural stakeholders across the commonwealth.”

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