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12-6033/12-6035 Velde v. Border State Bank, appealed from U.S. Bankruptcy Court, District of Minnesota, Federman, B.J.

Wisconsin lawmakers debate prevailing-wage repeal

MADISON, Wis. — Lawmakers, construction companies and local government leaders sparred Tuesday over a Republican bill that would repeal Wisconsin’s prevailing wage law, with supporters saying the measure would save money and opponents arguing the law guarantees quality construction and wage equality.

The bill’s chief sponsors, Sen. Leah Vukmir, R-Wauwatosa, and Rep. Rob Hutton, R-Brookfield, told the state Senate’s labor committee that the law inflates costs for local governments and doing away with it would save tax dollars.

“Prevailing wage is an enormously unfunded mandate from state government,” Vukmir told the committee. “Those savings could be redeployed in a multitude of ways.”

Minority Democrats on the committee balked at the bill, saying it would result in shoddy construction work and more income inequality. They also argued it’s unclear whether repealing the law would truly result in savings.

“You get what you pay for,” said Sen. Bob Wirch, D-Pleasant Prairie.

Current state law requires local and state government units to pay a wage calculated by the state Department of Workforce Development to laborers, mechanics and truck drivers who work on public works projects. DWD determines the wage using a computer formula based on collected data from an employer survey, wage rates and fringe benefit packages and union contracts. The bill would erase that law.

Republican legislators are divided over whether to move forward with the measure, however. Assembly Speaker Robin Vos, R-Rochester, has said he doesn’t have the votes in his house to pass the bill and instead wants to rework the law using Gov. Scott Walker’s budget as a vehicle. Rep. John Nygren, R-Marinette, co-chairman of the Legislature’s finance committee, which is revising Walker’s spending plan, said Tuesday Republicans hadn’t determined what changes to include.

Sen. Stephen Nass, R-Whitewater, the labor committee’s chairman and a co-sponsor of the bill, is plunging ahead anyway, setting up the hearing Tuesday and scheduling a committee vote for Thursday. It doesn’t appear the bill will win even the committee’s approval, though. Sen. Howard Marklein, R-Spring Green, one of the five-member committee’s three Republicans, said he couldn’t vote for the measure because it’s unclear whether repeal would save money and supports reforming the law instead.

Nass has crafted revisions to the bill that would erase the prevailing wage for local government projects. The prevailing wage for state projects would survive, but the trigger threshold for applying it would move from $48,000 to $1 million for single-trade projects, defined as a project where a single trade, such as a carpenter or electrician, accounts for at least 85 percent of the total labor cost. The trigger threshold for multiple-trade projects would go from $1 million to $5 million.

Marklein said in an email he hasn’t reviewed all of Nass’ changes but is still working on a compromise with stakeholders. He did not elaborate.

The hearing Tuesday focused on the original bill. The room was packed with people waiting to speak.

Peter James, president of Fennimore-based H. James & Sons Construction, Inc., said the law allows his company to compete with out-of-state contractors, fund training for employees and recruit workers.

“[The bill] would destroy the stability of our industry … and create a vicious race to the bottom,” he said.

Eric Kass, assistant superintendent for finance in the Elm Brook School District, told the committee that the district is spending $12 million on heating and air conditioning over the next three years. Doing away with prevailing wage might save the district $500,000 over that period, Kass said.

John Mielke, president of the Wisconsin chapter of Associated Builders and Contractors, a national construction industry association, insisted that the lack of a prevailing wage would have no effect on the quality of construction, noting that job standards and safety regulations remain the same with or without the law. He added that DWD’s formula often results in prevailing wages that are higher than local wages, leading to unskilled workers making more than skilled workers.

West Bend Mayor Kraig Sadownikow implored the committee to let the free market dictate wages on public projects. Repealing the law would give local governments more control over their finances, he said.

“[Prevailing wage] is another way that Madison is putting its thumb on municipalities,” Sadownikow said.

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