Federation of Connecticut Taxpayer Organizations

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.