COLUMBUS -- The Ohio House launched hearings May 9 on legislation that would give local communities discretion on whether to follow the state's prevailing wage law on public works projects.
Backers of HB 163 and companion legislation in the Ohio Senate say the proposal stops well short of an outright repeal, as has been attempted in the legislature in past sessions.
Instead, Rep. Kristina Roegner (R-Hudson) said, it would give affected local governing authorities the power opt out of "state-mandated wage" requirements.
"A state-mandated wage is inflated because it is calculated including the base hourly union wage plus 'fringe' union benefits such as health, welfare, pension, apprenticeship, training, vacation, annuity, etc.," Roegner, primary co-sponsor of the legislation, told members of the House's Economic Development, Commerce and Labor Committee. "Prevailing wage is nothing more than a government mandate that forces taxpayers to overspend on construction projects."
Ohio's prevailing wage law has been in place for decades, requiring set wage rates for public construction projects. The requirements do not apply to school construction, a change was made by lawmakers about 10 years ago. More recently, lawmakers upped the threshold for projects to $250,000 from $200,000 in order for prevailing wage.
But Roegner and Rep. Craig Riedel (R-Defiance) said the existing law represents an overreach by state government in to local affairs and leads to higher costs for public construction projects.
"Most often this mandated wage drives up and inflates the overall cost of a project, leaving that local government entity less money to work with on other construction projects," Riedel said May 9. "By not allowing the labor rates to be part of the competitive bid process on a project, the taxpayer ends up overpaying because the free market is unable to play out."
HB 163 would enable local governments, public universities, special districts and others to bid public construction projects without mandated wage rates.
"The local government entity gets to choose for itself on a job by job basis whether it wants to use prevailing wage," Riedel said. "If Summit County wants to use prevailing wage on a project to pave a stretch of road it can choose to do so, and if at the same time Van Wert County decides that it doesn't want to use prevailing wage to pave a stretch of road and instead uses market rates, that likely saves taxpayer dollars, it can do so as well."
Twenty other states have no prevailing wage requirements, Roegner added.
But Democrats on the Economic Development, Commerce and Labor Committee voiced concern about the bill Tuesday. Rep. Thomas West (D-Canton) questioned whether the bill would lead to fewer jobs, lower wages and more people needing public assistance.
"Is this bill worth losing billions of economic activity?" he asked.
And Rep. Michele Lepore-Hagan (D-Youngstown) asked whether it would be more appropriate to increase local government funding.
Union groups also do not support the change -- according to the Ohio State Building & Construction Trades Council, Ohio's prevailing wage law "protects and preserves local area wages on federal and state construction projects. It guarantees that workers are paid fairly."
Matt Szollosi, executive director of the Affiliated Construction Trades of Ohio, who attended Tuesday's hearing, said his group is "adamantly opposed" to the legislation.
"Based on data that we have from a recent study that was commissioned and completed by professors at Kent State University, Bowling Green State University and Colorado State University, a severe weakening or repeal of prevailing wage would result in construction workers' incomes being reduced by 16 percent and would push a significant percentage of construction workers below poverty level and onto public assistance," he said.
Marc Kovac covers the Ohio Statehouse for Gatehouse Media. Contact him at email@example.com or on Twitter at OhioCapitalBlog.