Unions Fight to Block $40 Million in Taxpayer Savings

Prevailing Wage OutdatedPennsylvania legislative leaders continue discussions over increasing transportation funding. In return for higher spending, some negotiators are seeking modest, common sense reforms to the prevailing wage law. These reforms would save taxpayers an estimated $40 million each year.

However, many union leaders are refusing to compromise or even come to the table, calling the archaic prevailing wage law their “Holy Grail.

Our 50 year old prevailing wage law adds no value to construction projects, but costs taxpayers a bundle—upwards of $900 per year for the typical family of four. The law requires the state to set the “prevailing wage” (a union-inflated amount, usually higher than the same workers make for the same work on private projects) paid by state and local governments on any public construction projects above $25,000.

The threshold has not been adjusted since the early 1960s, when $25,000 was twice the cost of the average home. Just adjusting for inflation, the threshold should be around $200,000.  HB 796 raises the threshold to only $100,000.  

According to the bill’s fiscal note, this single reform would save about $14.9 million annually. That savings could be used to complete additional projects, like fixing bridges.

Another common sense reform on the table is excluding road maintenance from the mandate. HB 665 would save the commonwealth an estimated $8 million, counties $1.4 million and municipalities $17.4 million each year.

Regardless of what happens with the transportation bill, it’s past time we make these common sense reforms to ensure taxpayers are getting the most bang for their buck. Laws like prevailing wage ensure we’ll continue to waste scarce resources to protect special interests.