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Committee uncertain if Prevailing Wage should be repealed

JEFFERSON CITY, Mo. – On Wednesday’s Senate Interim Committee on labor reform, Chairman Dave Schatz unveiled data he collected regarding Missouri’s Prevailing Wage Law. In his 23 page report, he found that about 85% of public works projects on the local level are under $500,000 and most of the projects are for local governments and colleges.

The committee also heard 21 testimonies over about two and a half hours from financially-burdened mayors, contractors worried about layoffs, and “a citizen activist for economic freedom.” The committee was formed to gather information and come to a solution about if the legislature was going to repeal the law and, also importantly, how.

Schatz feels that rather than completely repealing the law, he’d rather amend the law so that Prevailing Wage would only be in effect on projects over $500,000. States like Wisconsin, Arkansas, Maryland, Nevada, and New Mexico have similar laws. According to his findings, even though there are significantly more projects under that threshold, they account for less than 10% of the total cost of public works projects. He believes that such a reform could lower taxes for Missourians.

“There can be some savings generated,” Schatz said. “We want to see what the effects are going to be on the contractors. My concern has always been on whether a total repeal is being concerned about the contractors and the workers that employ the people to make sure that there’s adequate opportunities for them to provide employment for those individuals. We’re not trying to jerk the carpet out from anyone on this issue, but… can we spend the public’s dollar in a better fashion?”

Some believe that the public’s dollar can best be spent without a Prevailing Wage at all. A south central Missourian spoke about his small rural county which needs to build a new jail, but also wants new sheriff’s offices and a courtroom. To build the jail that the county needs, it would cost about $12-13 million. A similarly sized jail in Kansas, a state without a Prevailing Wage law, cost $10 million.

“Our architect advises us that we most likely will not be able to afford the law enforcement [offices] or the courtroom unless there is action from the legislature… I asked the construction manager, ‘Why can’t we build a jail for $10 million?’ … With a smile, he goes, ‘remember you’re in a Prevailing Wage state, it’s gonna cost you,’” the repeal advocate lamented.

Those wishing to testify

Sen. Dan Brown sympathized with the county’s problem. “If ever there’s a county that needs a new jail, it’s us. We need a lot of help. I would like to be able to help achieve some of those goals,” he added.

However, some feel Prevailing Wage helps businesses and employees. Walter Bazan owns a painting company in St. Louis. If the law were amended or repealed, his mid-size company could not grow and 8-10 of his 100 employees would lose their jobs. “I’m here

“I’m here though today, because I’m afraid. I’m afraid of all of you. I’m afraid that repeal of Prevailing Wage or high thresholds will hurt my company… High thresholds hurt small businesses. They hurt small contractors,” he warned.

The Senate Interim Committee plans on meeting again before the fall, but has yet to set a date.