Senate committee passes prevailing wage law on partisan vote

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Senate committee passes prevailing wage law on partisan vote
By Phil Kabler, The Charleston Gazette

Legislation to repeal the state’s prevailing wage law (SB361) passed the Senate Government Organization Committee Tuesday evening on a partisan 8-5 vote, although the committee chairman said he believes there is still time to work on a compromise short of an outright repeal of the law.

“There’s going to be some work done to be able to get the negotiations together,” said Chairman Craig Blair, R-Berkeley, a longtime advocate of repealing prevailing wage. “There’s ample opportunity for compromise to go on.”

Sen. Ron Miller, D-Greenbrier, called the legislation an attempt to destroy the workforce in West Virginia, and said, “It saddens me. It sickens me. It disappoints me.”

He said afterward he believes some of the Republicans who voted for the repeal bill in committee did so believing a compromise can still be reached.

Possible compromises include setting thresholds so that prevailing wages would apply only to larger, higher-cost construction projects, or revising the complicated formula for setting prevailing wages county-by-county each year using surveys of contractors, among other data – with testimony Tuesday that the current system is convoluted and outdated.

The meeting, which began Tuesday afternoon and resumed in the evening, was set against a backdrop of hundreds of construction workers and contractors who not only packed the Senate Judiciary Committee room, but also filled the adjacent hallway in the West Wing of the Capitol.

Sen. Doug Facemire, D-Braxton, made reference to the throngs of workers in expressing his opposition to the bill.

“Is it really worth it to cut these people’s wages when we don’t know if it’s going to save any money on our construction costs?” said Facemire, citing contradictory studies about whether prevailing wage is costly or cost-effective for the state.

Supporters of the repeal measure contend that prevailing wage artificially inflates wages for workers on state-funded construction projects, raising costs and reducing the number of projects the state can afford.

“It’s just simple economics: If you pay more for something, you get less of it,” Greg Allen of J.F. Allen Co. contractors, told the committee.

Opponents cited studies showing that, in fact, state-funded construction projects are not more expensive, because prevailing wage allows companies to hire highly skilled workers with high productivity.

“We’re willing to talk, and we’re willing to compromise, but keep in mind there are hundreds of businesses in the state that rely on this level playing field,” Steve White, with the Affiliated Construction Trades, said of prevailing wage.

“There’s room to find ways to improve this, but repeal would be disastrous,” he added.

White said studies show prevailing wage adds between $55 million to more than $80 million a year to state personal income tax and sales tax collections, and said supporters of the repeal are gambling that savings on the costs of construction projects will outweigh that lost tax revenue.

“If you’re banking on savings and don’t get it, and have these losses, that’s something to take into consideration,” White said.

Blair said there was urgency to move the bill out of the committee and to the Senate floor, so it can complete the legislative process with enough time remaining in the 2015 regular session to allow the Legislature to override any potential veto of the bill by Gov. Earl Ray Tomblin.

“The clock is our enemy from that standpoint,” Blair said Tuesday, the 21st day of the 60-day regular session.

Issues raised Tuesday included the survey system the state Division of Labor uses to set prevailing wages annually for different construction jobs.

“I don’t find very many who will defend how the prevailing wage is set in West Virginia,” retired Marshall economics professor Cal Kent told the committee.

Kent noted that the findings of studies of prevailing wage are all over the board, with results frequently skewed to correspond with the positions of the sponsors of the studies.

Estimates of additional cost of prevailing wage on construction projects vary anywhere from 2½ percent to 37 percent, depending on the studies, he said.

“That’s one of the things that needs to be clarified,” Kent told the committee.

He said he also could find no statistical evidence to support claims that prevailing wage contributes to workplace safety and better on-the-job training for new workers.

West Virginia is one of 32 states with a prevailing wage statue for state construction projects.

Sen. Herb Snyder, D-Jefferson, noted that Mississippi is one of 18 states without a prevailing wage law.

“How does that work for Mississippi?” he asked rhetorically. “Is there great progress and tremendous jobs there?”