Full repeal of Wisconsin’s prevailing wage requirement is once more gaining 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 already-tense talks about how to break the state budget impasse. Lawmakers and Gov. Scott Walker already missed a July 1 deadline to enact the budget.
Twenty-four GOP lawmakers included prevailing wage repeal in a separate proposal, made public Thursday, that they say would cut costs at the Wisconsin Department of Transportation.
Together the developments re-ignite a prevailing wage repeal debate that, at least publicly, had grown dormant in recent weeks.
My column for the West Bend Daily News is online. Here you go:
Another battle in the long war to repeal Wisconsin’s Prevailing Wage Laws was launched this month when Sen. Leah Vukmir (RBrookfield) and Rep. Rob Hutton (RBrookfield) reintroduced a bill in the state Legislature to repeal the prevailing wage law for state projects. The bill faces an uncertain future in the face of massive opposition from powerful special interests.
Wisconsin’s prevailing wage “law” is actually a series of laws that were passed during the Great Depression with the goal of protecting local workers from losing their jobs to migrant workers who were willing to work for lower wages. The law essentially requires that any businesses that work on a public project of any size must pay the prevailing wages for the area in which the work takes place.
The prevailing wage is determined by a flawed process by the Wisconsin Department of Workforce Development that heavily favors inflated union wages. The result is Wisconsin’s prevailing wage law protects large, unionized contractors at the expense of inflated prices for taxpayers and non-union contractors.
Intrepid conservative Wisconsin lawmakers fought hard to fully repeal the prevailing wage law in the 20152017 state budget. The result was a compromise that repealed the prevailing wage law for local governments and school districts, but left it in place for state projects. The bill from Vukmir and Hutton would finish the job by repealing it for state projects too.
The reason the fight to repeal the prevailing wage law is so heated is quite simple: money. As it stands, Wisconsin’s prevailing wage law props up the profits for some of Wisconsin’s largest private contractors. Those contractors donate an extraordinary amount of money and support to politicians on both sides of the aisle who like to spend taxpayer dollars on big, expensive projects.
In the 2015 battle over prevailing wage, Assembly Speaker Robin Vos and other members of the Assembly leadership actively worked to thwart the repeal of prevailing wage. They could not resist the overwhelming public pressure and were forced into the compromise repeal. Last legislative session, Representative Andre Jacque had the temerity to hold a hearing on prevailing wage reform in his role as the Chairman of the Assembly Labor Committee. Jacque’s fellow Republican,
Vos, punished Jacque by stripping him of his chairmanship for the current session.
The reason to repeal the prevailing wage law is one of conservative principle – or of laissez-faire economics, if you prefer. The government should not enforce artificial labor prices or meddle in the free market. Wisconsin’s prevailing wage law does just that and it results in the government distorting the market and encouraging crony capitalism.
While one would like to think that our state lawmakers would consistently act on principle, repealing the prevailing wage law would also be in their self-interest.
There is another war waging in the Legislature over transportation spending. The prevailing wage law aggravates that issue by inflating spending on state transportation projects. A 2015 study by the Wisconsin Taxpayers Alliance showed the state’s prevailing wage law was responsible for up to $300 million per year in unnecessary costs. In terms of Wisconsin’s biennial budget, that is potentially $600 million that could be used for additional transportation spending without borrowing or raising taxes. Such a windfall would release a lot of the political steam that is heating up the debate over transportation spending.
While it was disappointing that Wisconsin’s prevailing wage law as not fully repealed in 2015, state lawmakers now have the opportunity to finish the job for the benefit of state taxpayers. They should quickly pass Vukmir and Hutton’s bill and put it on Governor Walker’s desk – preferably before the state budget so that lawmakers can include the potential windfall savings into their budget calculations.
Sen. Leah Vukmir, R–Brookfield, and Rep. Rob Hutton, R–Brookfield, Tuesday reintroduced a bill that would repeal Wisconsin’s prevailing wage law for state projects following the announcement the initiative was removed from the budget last week.
“As lawmakers we have a responsibility to manage the transportation budget efficiently,” Vukmir said in a news release. “It’s unrealistic to do so without the accessibility of all tools. Repealing this burdensome red tape will ensure the use of taxpayer dollars are maximized.”
“Two years ago we passed prevailing wage reform for local governments,” Hutton said in the release. “It is now time to finish what we started and pass full prevailing wage repeal. As we look at the transportation budget this spring, we must ensure taxpayers are receiving the best value for their tax dollars.”
In the 2015-17 budget, the prevailing wage requirement was repealed for local governments, including towns, cities, counties and school districts beginning on Jan. 1, 2017. Now local governments can receive competitive bids for projects that don’t include unreasonably high prevailing wage costs, the lawmakers said
Republican State Representative Andre Jacque tells Media Trackers that he has been stripped of his Assembly committee chairmanships by Speaker Robin Vos as punishment for holding a hearing on prevailing wage reform legislation in the Labor Committee this past legislative session. A news release issued by Vos’ office Wednesday afternoon showed that Jacque was the only committee chair not to retain a chairmanship for the next session. Jacque is the only non-freshmen member without a committee chairmanship. Jacque told Media Trackers Vos made no secret of the reason why:
Repealing prevailing wage was, and is, overwhelmingly supported by the Republican base. Vos did not want any repeal in the last session and fought it all the way. That’s why the repeal that was eventually passed was watered down to not include state projects. Vos doesn’t support repeal for the same reason he’s been passionately advocating for a gas tax increase – he’s in the pocket of the Road Builders Lobby.
Assembly Speaker Robin Vos, R-Rochester, says he’s open to a repeal of the prevailing wage for state projects if it’s part of a larger transportation package.
Republicans this session repealed the requirement for local projects, and some have called for doing the same with state work after the GOP won bigger majorities in both houses during this fall’s elections.
While he is open to the change, Vos said Thursday it alone wouldn’t be enough to address the state’s transportation funding needs.
Over the past few weeks I have been cautiously optimistic, working diligently behind the scenes regarding transportation funding and prevailing wage reform. A few weeks ago, I submitted a budget motion suggesting that the DOT go back to the days of maintaining our roads instead of adding frills to projects such as extra beautification measures, closed circuit cameras, overhead message boards and highway on-ramp gates. Unfortunately, this motion was rejected. I have also been a strong supporter of the Governor’s budgetary removal of the “complete streets” mandate, requiring a one-size-fits-all approach to highway projects. This requirement would have forced the villages of St. Cloud and Campbellsport to install bicycle lanes through town, eliminating half of the available parking during road improvements.
These issues aside, prevailing wage reform provides a real solution to a real funding problem. The state has kicked the can on transportation funding for over a decade and yet, we continue to borrow and spend. Responsible citizens must live within their means. As a legislator, I demand that we budget within our means as a state. At times, this may require bold reforms. Some legislators have requested increases in revenue sources to fix the problem, including gas tax increases and higher registration fees. These revenue “uppers” are not in my playbook – at least not when we have before us a real solution with real savings. The elimination of the state’s prevailing wage law would remove artificial state intervention on public works projects, allowing smaller contractors to bid on projects, give schools with building referendums (such as Campbellsport) real savings and provide our counties and municipalities with long-overdue relief on local road projects.
These savings are real and will positively impact our state. I pray that we see these savings implemented through the state budget this week.
The Senate will introduce an amendment to the budget tomorrow that would add in prevailing wage changes proposed by Sen. Frank Lasee, a spokeswoman for Majority Leader Scott Fitzgerald said.
“We believe it will pass,” Myranda Tanck said.
Lasee, R-De Pere, has proposed repealing the prevailing wage for local governments and using the federal wage for state projects.
It would be good if the Senate passed this first for two reasons. First, it is in the Senate that the vote is less certain, so let’s get it passed their first. Second, if the Senate passes it first, it helps dissuade Speaker Vos in the Assembly from monkeying with it.
Here’s an indication of how fierce it is getting the Republican caucus right now. I’m thankful that my representative is sticking to his guns and fighting for the taxpayers.
From: Gannon, Bob Sent: Friday, July 03, 2015 7:48 AM To: Rep.Murtha; *Legislative Assembly Republicans Subject: RE: CAUCUS Tuesday, July 7
I’ll be unable to attend caucus on Tuesday, but I am very comfortable with my level of understanding of the 2015 – 2017 budget. My vote will remain a no unless prevailing wage reform is dealt with as a part of this budget. I have offered to leadership to reconsider my position if they will allow the Lasee prevailing wage vote to come to the floor before the budget. At this time the only sound from leadership is crickets, thus they must be comfortable that they don’t need my vote, or the vote of any other like minded conservative interested in the best interests of their constituents, and not some special interest lobby.
Speaking of lobbyists, I was embarrassed, and fearful of media exposure to this dramatic public theater, that John Gard, appointed and highly compensated pimp for the road builders lobby, was working the room in GAR leading up to closed caucus on Wednesday. I’m sure the media would have a field day if any intrepid reporter had the wherewithal to actually have witnessed that abusive act. This is the kind of garbage behavior that makes politicians of all stripes get a certain level of stink on them.
For your own edification, I’ve attached a draft of a press release I’m working on to explain my position on the budget vote. Feel free to share this and my e-mail with the rest of the caucus if you wish, as I am more than willing to discuss my position with any of my peers or constituents.
Fighting for the 58th, and now, kind of a lone warrior fighting for the financial integrity of the entire state
From: Rep.Murtha Sent: Thursday, July 02, 2015 4:12 PM To: *Legislative Assembly Republicans Subject: CAUCUS Tuesday, July 7
We will be having a caucus meeting next Tuesday, July 7th at 1:00 pm in GAR. Fiscal Bureau will be there to brief us on the budget and answer any questions, and we will also finish up discussions regarding the other issues on the floor next week.
As always, please be in your seats at 1:00pm sharp. If you cannot attend, please let my office know by 5:00 pm on Monday
The Assembly plan would significantly increase the minimum threshold for the cost of projects that are subject to prevailing wage — putting that threshold at $450,000, which Assembly Republicans said would be the second-highest of any state. The current thresholds in Wisconsin are between $48,000 and $100,000, depending on the project. The Assembly plan also would link the threshold to future increases through indexing.
The proposal would change the state’s formula for calculating prevailing wage, in an effort to address what some say are artificially high wages in rural areas. It also would carve out prevailing-wage exemptions for technical college projects, residential and agricultural projects and projects funded primarily by charitable donations.
The bill needs 50 votes to pass, so assuming that all of the Democrats will vote against repeal and all of the Republican co-sponsors will vote for it, that means that Vos thinks that at least 11 of the following Republicans will vote against a full repeal:
Tyler August – Lake Geneva – 32nd (on this list in error – is a co-sponsor. He’s for full repeal!)
Dave Craig – Big Bend – 83rd
James Edming – Glen Flora – 87th
Dave Heaton – Wausau – 85th
Cody Horlacher – Mukwonago – 33rd Terry Katsma – Oostburg – 26th
Samantha Kerkman – Randall – 61st
Joel Kitchens – Sturgeon Bay – 1st
Scott Krug – Wisconsin Rapids – 72nd
Amy Laudenbeck – Clinton – 31st
John Macco – Ledgeview – 88th
Dave Murphy – Greenville – 56th
Jeff Mursau – Crivitz – 36th
John Murtha – Baldwin – 29th
Lee Nerison – Westby – 96th
Todd Novak – Dodgeville – 51st
John Nygren – Marinette – 89th
Al Ott – Forest Junction – 3rd
Warren Petryk – Elva – 93rd
Romaine Quinn – Rice Lake – 75th
Keith Ripp – Lodi – 42nd
Jessie Rodriguez – Franklin – 21st
Mike Rohrkaste – Neenah – 55th
John Spiros – Marshfield – 86th
David Steffen – Green Bay – 4th
Jim Steineke – Kaukauna – 5th
Gary Tauchen – Bonduel – 6th
Travis Tranel – Cuba City – 49th
Nancy VanderMeer – Tomah – 70th Tyler Vorpagel – Plymouth – 27th
And, of course, Robin Vos – Rochester – 63rd
So who are the hold outs? Let’s try to narrow it down some. Vos has claimed to be in support of full repeal, so that’s 36 votes in favor. Who else is on record? Jessie Rodriguez was elected as a conservative darling in Franklin, does she support full repeal? What about John Nygren? Scott Krug?
As Speaker, Vos won’t name names, but that doesn’t mean that we can’t. Which Republican Assemblymen are preventing Vos from calling for a vote on full repeal?
Last week, I made my position clear that my vote on the budget is solely dependent on full repeal of prevailing wage for local units of government – all other provisions are negotiable. Since then, it has become clear an effort is underway to draft a compromise package of “reforms” to be included in the budget. These “reforms” would likely include exempting a limited number of entities, tweaking the methodology for collecting wage data, and increasing certain project thresholds. In my eyes, this sort of “reform” is unacceptable, especially since a full repeal enjoys such broad support from the Governor, legislators and Wisconsinites statewide.
Just last week I spoke with several contractors on this issue. While I appreciated their willingness to sit down and share their concerns regarding full repeal with me, it is clear they are currently participating in the negotiations to create a “reform” package. It was made abundantly clear that in the event thresholds were raised, they would simply be advocating for a lowering of thresholds in the future. A “reform” package that does not include full repeal would mislead the taxpayers into thinking the problem has been fixed. Unless we enact full repeal, the state will never have the stability that would benefit every unit of government and ultimately every taxpayer.
Real reform requires full repeal for local units of government. I did not run for the State Senate to make bad policy less bad. I ran to lower the tax burden on the hardworking taxpayers of this great state. I ran to eliminate unnecessary red tape holding our small businesses back. I ran to ensure those essential programs and services that governments provide are done so in the most efficient and effective manner possible. Artificially raising the cost of local capital improvement projects is the antithesis of good government.
As uncomfortable to some as these negotiations may be, I will not back down from my position that this budget must include full repeal for local units of government – anything less maintains the status quo and is therefore unacceptable.
MADISON — The Assembly Labor Committee approved a measure that would eliminate Wisconsin’s prevailing wage law. The committee voted Wednesday 5-4 with Republicans in favor advancing the bill. Rep. John Spiros (R-Marshfield) joined Democrats in voting against the measure.
MADISON (AP) — Gov. Scott Walker says he will sign a prevailing wage repeal bill if it passes the Legislature.
Laurel Patrick in a statement Wednesday said Walker has discussed the repeal with lawmakers and has considered supporting it in the state budget. Walker has previously said prevailing wage wasn’t a priority.
On a side note, if this passes the Assembly despite Speaker Vos’ active opposition and claim that the votes aren’t there, the caucus should consider whether he is still the right guy for the job as Speaker.
MADISON, Wis. (AP) — A Wisconsin state Assembly committee has scheduled a public hearing and vote Wednesday on a bill to repeal the prevailing wage.
I heard the committee chairman, Andre Jacque, on the radio this morning talking about it. He indicated that he called the hearing without the approval of Speaker Vos. So the leadership is still trying to kill this, but the conservatives in the caucus are rebelling.
Major kudos to Jacque and the conservative caucus. Let’s get this done!
Two sources in Madison tell me that a notice will be issued Tuesday morning for a public hearing and anticipated vote Wednesday in the Assembly Labor Committee on a bill that would fully repeal the state’s antiquated prevailing wage law. The law artificially inflates labor costs on public construction projects. Sources had previously told me that an earlier effort at a hearing was put down by Assembly Speaker Robin Vos. Vos is believed to fear that repealing Prevailing Wage will cost Republicans seats in future elections.
I am told that the ranks of those in the Assembly who feel repealing prevailing wage is critical to the overall budget process are growing. I’m also told that it’s unlikely Vos will be able to stop this hearing from happening. Sources tell me that Joint Finance Committee would be expected to vote on the bill Friday or Saturday. I’m told it’s possible that if a bill is ultimately voted on by lawmakers that it could be amended into a bill that narrows the scope of the law, perhaps to local government projects only, but does not fully repeal it. But the bill getting a hearing Wednesday would be for full repeal. It’s also possible that no bill will get a floor vote.
Sources tell me that there is a growing concern among lawmakers that it’ll be impossible to make budget numbers work without the savings that would be realized by repealing prevailing wage. I’m reaching out to Labor Committee Chair Representative Andre Jacque to get him on my show tomorrow morning to discuss.
Here’s the thing… the numbers are clear that repealing prevailing wage would save the state and local governments hundreds of millions of dollars per year. There is not a good economic or philosophical argument for preserving the laws – there is only a political argument.
The Republicans who want a Bucks arena, more K-12 spending, more transportation spending, more tax cuts, etc. are going to have a hard time convincing many of their colleagues to vote for their initiatives if they are unwilling to make this simple change to free up a lot of money.
The votes are there on the floor to repeal the prevailing wage laws. That is why leadership has been fighting like hell to keep it from getting to the floor. If Bader is correct and it makes it to the floor of the Assembly, it will pass. Then the onus is back on the Senate to get this done.
Call your legislators. The next few weeks are when everything happens.
My column for the West Bend Daily News is online. Here you go:
Repealing Wisconsin’s prevailing wage laws would be one of the most beneficial and impactful actions that the legislature could possibly take this session, but it looks like it might not happen.
The prevailing wage laws were first enacted in Wisconsin during the Great Depression as a means of protecting local workers from losing work to migrant workers who might do the work for cheaper. It was one of many protectionist laws passed during that era. The law essentially requires any the businesses that work on any public project of a given size to pay the prevailing wages for the area in which the work will take place.
In practice, the prevailing wage laws mean that taxpayers must spend a lot more than necessary to get work done. The Wisconsin Department of Workforce Development sets the prevailing wage for an area by means of an annual survey. As the Wisconsin Taxpayers Alliance recently pointed out in a study, the survey is hopelessly flawed. Only about 10 percent of the surveys are completed and returned, and 87 percent of the respondents are union, as compared to only about 25 percent of the industry. In short, the “prevailing wage,” according to the DWD, is not representative of the actual wages being paid in that area. In fact, they are about 45 percent higher than the actual market rates.
While the same study says that the prevailing wage laws cost Wisconsin taxpayers as much as $300 million per year in unnecessary costs, let us see what that looks like in local terms. West Bend Mayor Kraig Sadownikow points out that West Bend does about $1 million per year in road maintenance. Most of that work is subject to the prevailing wage law. The end result is that West Bend can improve about 25 percent fewer road miles than it could if the taxpayers were allowed to pay the actual market labor price for those projects. Another way to look at the math is that with the same amount of money, West Bend could improve fully 33 percent more roads every year for the same money if the prevailing wage laws were not in effect. That’s a huge difference.
In another example cited by Sadownikow, the prevailing wage laws also apply to public projects that are not funded by taxpayers. In West Bend, private donations from local corporations and citizens were used to fund 100 percent of the improvements for the stage, pavilion and concession stand in Regner Park. Even though no taxpayer dollars were used, the prevailing wage laws meant that every dollar donated only purchased 75 percent of the products and services that they would have if the projects were on private property.
These two examples alone represent hundreds of thousands of wasted dollars for just one community. The prevailing wage laws are costing all Wisconsinites real money, and yet the Republicans in the legislature are seemingly unable to garner the votes to repeal them. Why? The excuse given for public consumption is that repealing the prevailing wage laws would harm the workers who are currently being paid the inflated wages, and that would harm Wisconsin’s economy. That is an incomplete picture. The money to pay for those inflated wages comes from somewhere — the wages of other Wisconsin workers. And the above-market wages being paid for public projects means that fewer projects are being done than could be. That means fewer people being employed to work on those projects.
But the real reason that some Republicans are opposing the repeal of the prevailing wage laws is the one that they won’t put in a press release. Many of the people who oppose the repeal are the owners and bigwigs of the large contractors that do most of those public projects. The large contractors love the prevailing wage laws because they artificially inflate the cost of labor and prevent newer, hungrier, companies from underbidding them. The law protects their business and their profits. And many of them are large political donors to Republicans.
In the end, we have the most basic of political calculations. The argument in favor of repealing the prevailing wage laws is a simple one of principle. The argument opposed is one of base political cronyism.
Sadownikow said it best. The laws of supply and demand work far better than the prevailing wage laws. Wisconsin’s legislative Republicans should remember that.
Madison— Highlighting the Republican split on Wisconsin’s prevailing wage law, a key western Wisconsin senator said Friday that he doesn’t support repealing the statute.
One day after a conservative senator scheduled a committee vote on the prevailing wage repeal, Spring Green Sen. Howard Marklein made clear that the vote on the measure will fail.
On a break from spring planting on his tractor, Marklein said he wants to rewrite the 84-year-old law, not repeal it.
“If the (repeal) bill is as is, I’m going to be voting no,” Marklein said. “The prevailing wage law isn’t perfect by any means, but I’ve got people in my district, contractors and workers, who are affected by it. I’m not comfortable at this point with full repeal.”
There is no rational argument for preserving the prevailing wage law other than that it puts money into the pockets of some business owners and unions. It does so, however, at the cost of every taxpayer in Wisconsin.
Marklein, remember, was just elected after running as a conservative against the long-time RINO Dale Schultz. And now on the first test of his conservatism, he is failing. He is caving to some special interests in his district.
Vos spoke on WISN-AM in Milwaukee on Wednesday morning that he supports a full repeal of prevailing wage but it’s likely that lawmakers will insert changes to prevailing wage law into Gov. Scott Walker’s budget. He did not elaborate.
This law costs the taxpayers hundreds of millions of dollars in wasted spending. That’s real money that could be used to fund a lot of other priorities. But it looks like we’re going to just keep wasting it because that’s what Wisconsin government does.
Uh, Robin? Why not? What possible reason is there to not repeal this law other than there is a lobbying group of contractors who receive the inflated contracts pushing against it? Shouldn’t the taxpayers’ interests come first?
But in the midst of the back and forth, Assembly Speaker Robin Vos, R-Rochester, has maintained his position that prevailing wage will not be repealed. According to his office, Vos remains focused on finding ways to improve the law.
Rep. Rob Hutton, R-Brookfield, held the press conference with various repeal supporters representing the construction industry, independent businesses, municipalities and school districts. Hutton, who wrote the Assembly’s repeal bill, said discussions with leadership are ongoing about whether AB 32 would go through the public hearing process as a standalone bill or be incorporated into the budget.
“The discussion right now,” Hutton said after the press conference, “is more so where do we place it and when do we place it.”
Sen. Leah Vukmir, R-Wauwatosa, wrote the Senate’s companion bill, SB 49.
Prevailing wages, which are based on state surveys of companies, apply to most public works projects and are minimum rates of compensation for workers in individual trades in specific counties.
During the press conference, Hutton said he is not focused on trying to improve a law that he considers irrelevant, but he still left the door open a crack to the possibility of change rather than repeal.
Yes, difficult budgetary decisions will have to be made, but the decision to eliminate the antiquated prevailing wage requirement need not be one of them. Good government demands this common sense reform.
The prevailing wage is an artificially inflated wage that by state statute applies to nearly all public works projects in Wisconsin. It is a wage determined by a government bureaucracy, not by true competition in the marketplace. It is protectionism at its worst that unnecessarily costs local taxpayers hundreds of millions of dollars annually.