HARRISBURG – Senators Kristin Phillips-Hill (R-York), Scott Martin (R-Lancaster) and Judy Ward (R-Blair/Cumberland/Franklin/Fulton/Huntingdon) plan to introduce a bill they say will help local governments and school districts address fiscal challenges and infrastructure obligations.
The senators propose to allow counties, school districts and municipal governments to opt-out of the state’s prevailing wage requirements through the end of 2022. Prevailing wage requirements dictate that public works construction projects must be paid at a calculation based on local wages, including collective bargaining agreements.
Studies have shown that prevailing wage requirements can add on anywhere from 10 to 30 percent in additional costs for building projects. Transportation projects above $100,000 are subject to prevailing wage, a change the General Assembly made in 2014. According to the U.S. Department of Labor in 2018, 22 states did not have prevailing wage laws.
The senators’ forthcoming bill is laid out in a memo to their colleagues, which states, “This optional moratorium would last until December 31, 2022 and would serve to help our local communities that have been struggling due to the governor’s complete shutdown of the Commonwealth back in March.”
“The pandemic has put a major financial strain on governmental entities across the board and we are going to see ripple effects of the devastating and prolonged economic shutdown over the coming months. We need to give our local elected officials every tool to meet the needs of their constituents by being good fiscal stewards of those hard-earned taxpayer dollars,” Phillips-Hill said.
“With schools and local governments facing extraordinary new challenges and financial concerns, it is critical to ensure they have every option at their disposal to save money,” Martin said. “This bill simply gives them the option to determine for themselves how to allocate taxpayer dollars in the best interests of their community and complete construction projects efficiently.”
“Giving our school districts and local governments this option can help them control their costs on construction projects during these difficult financial times,” Ward said. “With all of the fiscal struggles facing these entities and taxpayers, we need to provide as many options as possible in order to save money.”
The state has not adjusted its prevailing wage law to account for inflation since 1963. The senators argue that the nearly 60-year-old law has not kept pace with the current cost of construction, with prevailing wage applying to all building projects over $25,000.
The senators plan to introduce the legislation prior to the Senate of Pennsylvania’s return to legislative session on September 8.