Reforming Connecticut’s Prevailing Wage Law Would
Save Taxpayers Money
January 5, 2010 Rob.Kane@cga.ct.gov.
http://www.senaterepublicans.ct.gov/press/kane/2010/010510.html
Connecticut’s cities and towns
desperately need the General Assembly’s help to control their costs and, thus,
control local taxes. One of the important things legislators can, and should,
do this year is to reform the state’s prevailing wage law.
State law requires wage and benefit
packages for new construction projects that cost at least $400,000, and cost at
least $100,000 for renovation projects to meet prevailing wage requirements set
by the state for the communities in which the work is performed. This is
problematic for two reasons: prevailing wage requirements apply to state and
municipal construction projects, but do not apply to private sector
construction projects, and prevailing wage requirements that prevent state and
local governments from accepting the lowest bid inflate the cost of public
works projects.
Recently, I served on Governor M.
Jodi Rell’s municipal mandates reform working group
that recommended, among other things, that the General Assembly make changes to
our prevailing wage law. The group recommended that the General Assembly
suspend the prevailing wage law for state-funded municipal projects for towns
and cities that meet a certain level of distress, or for the duration of the
economic downturn. While I certainly agree with these recommendations, I
believe there are additional steps the General Assembly should take to reform
the state’s prevailing wage law.
Last year, I co-sponsored prevailing
wage reform legislation that, unfortunately, was not adopted by the General
Assembly. Keeping in mind that it often takes more than one year for good ideas
to be made into law, I plan to support similar legislation this year. One of
the proposals I supported last year called for increasing the threshold amount
for both new and renovation public works construction projects to $1 million,
and to index the threshold for all municipal construction projects to the
inflation rate. Another proposal called for stabilizing the impact of the
prevailing wage law on the costs of long-term projects. Under this bill, the
wage rate for public works projects subject to the prevailing wage law would be
determined by the wage rates effective at the time of the bid, and would remain
in effect for the duration of the project.
According to the Connecticut
Conference of Municipalities (CCM), the General Assembly has not adjusted the
project costs thresholds that trigger the prevailing law since 1991. Also, a
report issued by CCM early last year contends that prevailing wages are
considerably higher than average wage rates. Other experts and studies have
also claimed that the prevailing wage law adds to the cost of public works
projects.
The fact is that government is too expensive and we must be creative about
cutting costs. While we can blame some of Connecticut’s ongoing fiscal problems on the
national recession, we must also admit that state government’s penchant for
overspending has not helped our situation. A very important key to solving our
fiscal problems lies in shrinking the size and cost of state government, and in
alleviating the impact of unfunded and underfunded
state mandates on municipalities. Reforming our state prevailing wage law would
be a good start.
As always, I welcome the opportunity to discuss the issues that are important
to our state. Please feel free to share your concerns about our state budget
problems, and your ideas for solving them. I can be reached at my legislative
office in Hartford
at 1-800-842-1421, or via e-mail to Rob.Kane@cga.ct.gov.