Fiscal responsibility entails not only cutting wasteful spending, but even more importantly, includes the implementation of government reforms that prioritize taxpayer dollars. The Republican leadership deserves credit for producing their second sustainable budget, but in a time when lawmakers are asking school districts and local governments to do more with less funding, there must be a focus on enabling local officials with the ability to do so.
Recognizing this necessity, Rep. Fred Keller (Snyder/Union) introduced House Bill 1329 to alleviate the costly prevailing wage laws on construction and renovation projects. The bill would effectively ease the financial burden for schools and municipalities while protecting taxpayers and promoting job creation. Unfortunately, there have been significant delays in the path to reform in Harrisburg. It is absolutely essential that Pennsylvania’s taxpayers urge their Representatives to vote in favor of HB 1329.
The Commonwealth’s prevailing wage laws were enacted more than a half a century ago with the intent of protecting construction workers from out-of-state competition. The law requires local government to pay a mandated wage for construction projects exceeding $25,000. Straying far from its original intent, prevailing wage is responsible for increased labor costs upwards of 30 to 75 percent. This effectively adds more than 20 percent or $2 billion a year in extra construction costs.
In response, The Pennsylvania School Board Association (PSABA) testified before the General Assembly. They asserted that the prevailing wage law is “one of the most burdensome mandates imposed on school districts.” A PSBA representative explained that wage requirements take away resources that could be utilized to develop educational programs or provide property tax relief. The PSBA supports an outright repeal of the costly wage law.
In an interview with Rep. Keller, he proclaimed that his legislation is a compromise bill. Instead of repealing prevailing wage altogether, HB 1329 is designed to raise the minimum threshold to $185,000, accounting for inflation for the past 50 years. Rep. Keller argued that raising the threshold should not be deemed controversial, but rather common sense. The Union County lawmaker reasoned that the 1961 law exempted small-scale projects and that the $25,000 threshold in today’s prices no longer provides a meaningful exemption.
The reform measure has garnered substantial support from the PA State Association of Township Supervisors and Boroughs in addition to business interests throughout the state, but the compromise bill remains stalled in the State House. The bill, which was successfully reported out of committee for consideration this fall and scheduled for a vote last week, has been postponed yet again. Rep. Keller shared that the vote count is in the mid 90s, just shy of a 102 member majority, and there is a great possibility for the bill to receive a House vote shortly after the April primary elections.
It is vitally important that the General Assembly pass HB 1329 in order to provide schools and local government the relief they need from an antiquated and costly mandate. The reform measure will more efficiently spend taxpayer money, thereby reducing property tax increases. This savings can then be allocated towards additional construction and renovation projects, which will create more jobs.