Full repeal of Wisconsin’s prevailing wage requirement is regaining momentum after its lead state Senate supporter said it must be included in the next state budget.
The demand from Assistant Senate Majority Leader Leah Vukmir, R-Brookfield, inserts another wrinkle into talks about how to break the state budget impasse. Lawmakers and Gov. Scott Walker already missed a July 1 deadline to enact the new two-year spending plan.
Twenty-four GOP lawmakers included prevailing wage repeal in a separate proposal, made public Thursday, that they say would cut costs at the state Department of Transportation.
Back on the table
Together the developments re-ignite a prevailing wage repeal debate that, at least publicly, had grown dormant in recent weeks.
Two years ago, GOP lawmakers and Walker partially repealed prevailing wage, the minimum pay requirement for workers on public construction projects, by removing it from projects funded by local governments.
Vukmir’s proposal would abolish it entirely by removing it from state-funded projects. Only projects with federal funding would remain subject to the federal prevailing wage requirement, known as Davis-Bacon.
The repeal measure enjoys broad support from business groups, GOP lawmakers and Walker, who included it in his original budget proposal. The Legislature’s budget-writing committee removed it from the budget in April along with other non-fiscal provisions.
Prevailing wage repeal bills sponsored by Vukmir and state Rep. Rob Hutton, R-Brookfield, were heard by lawmakers this spring, but little has been said publicly about them since.
Now, Vukmir and at least two other senators say prevailing wage repeal needs to be back in the state transportation budget. Without a revenue infusion or new borrowing, lawmakers face a nearly $1 billion funding gap to match what they approved for highway improvement spending in the last budget, according to the state’s nonpartisan Legislative Fiscal Bureau.
“Any viable transportation proposal must include the repeal of this unnecessary law to receive the support it needs to pass the Senate,” Vukmir said in a statement.
Vukmir has said she is considering seeking the Republican nomination in 2018 for the U.S. Senate seat held by Democratic Sen. Tammy Baldwin, of Madison.
Senators whose offices told the Wisconsin State Journal they side with Vukmir include Chris Kapenga, R-Delafield, and Duey Stroebel, R-Cedarburg.
Kapenga, in a statement, said “any discussion on a viable transportation package must start with reforming the way WisDOT conducts business and must include a full repeal of prevailing wage.”
Not all senators are taking a hard line. Sen. Devin LeMahieu, R-Oostburg, said he’s fine with repealing prevailing wage as part of the budget or as a standalone measure.
Spokespersons for Senate Majority Leader Scott Fitzgerald, R-Juneau, and Assembly Speaker Robin Vos, R-Rochester, did not respond to requests to respond to Vukmir.
Vos said Thursday he supports the inclusion of prevailing wage repeal in the DOT efficiency proposal offered by the 24 lawmakers, which also include Hutton.
Eric Bott, a spokesman for Americans for Prosperity Wisconsin, a conservative advocacy group that has helped lead the push for prevailing wage repeal, said his group “fully anticipates that it will be put back in the budget.”
If at least three GOP senators side with Vukmir, they could attempt to ensure prevailing wage be included in any final budget deal. That’s because a budget likely must be passed with only Republican votes — all Democrats are likely to oppose it — and Republicans hold a 20-13 edge in the Senate.
A full repeal of prevailing wage would be another resounding defeat in Wisconsin for labor unions, which helped enact such measures nationwide during the New Deal era.
Democrats and labor groups say prevailing wage ensures all contractors have a level playing field when bidding for public projects. That helps Wisconsin contractors compete with those from out of state, while also preventing shoddy contractors from landing state jobs, they say.
Prevailing wage repeal supporters say the move is needed to cut costs for transportation projects. Vukmir has said it would save taxpayers hundreds of millions of dollars over time.
The nonpartisan Legislative Fiscal Bureau found “research on the impact of prevailing wage laws on construction costs is mixed and inconclusive.”
A fiscal estimate for the bill from the state DOT predicted it will save the department money but said it’s impossible to predict how much. The estimate notes that since most highway projects use federal funds, the bill only would exempt a small minority of projects from prevailing wage.
An estimate from the University of Wisconsin System said it cannot predict the bill’s impact on the System’s budget.
Indiana repealed its prevailing wage in 2015, and the assistant majority leader of its state House, Rep. Ed Soliday, told a group in Milwaukee earlier this year that “it hasn’t saved us a penny.” Soliday said proponents of the measure wildly exaggerated the potential savings, noting the vast majority of road construction costs go to materials, not labor.