Reforming Connecticut’s Prevailing Wage Law Would Save Taxpayers Money

January 5, 2010

Connecticut’s cities and towns desperately need the General Assembly’s help to control their costs and, thus, control local taxes. One of the important things legislators can, and should, do this year is to reform the state’s prevailing wage law.

State law requires wage and benefit packages for new construction projects that cost at least $400,000, and cost at least $100,000 for renovation projects to meet prevailing wage requirements set by the state for the communities in which the work is performed. This is problematic for two reasons: prevailing wage requirements apply to state and municipal construction projects, but do not apply to private sector construction projects, and prevailing wage requirements that prevent state and local governments from accepting the lowest bid inflate the cost of public works projects.

Recently, I served on Governor M. Jodi Rell’s municipal mandates reform working group that recommended, among other things, that the General Assembly make changes to our prevailing wage law. The group recommended that the General Assembly suspend the prevailing wage law for state-funded municipal projects for towns and cities that meet a certain level of distress, or for the duration of the economic downturn. While I certainly agree with these recommendations, I believe there are additional steps the General Assembly should take to reform the state’s prevailing wage law.

Last year, I co-sponsored prevailing wage reform legislation that, unfortunately, was not adopted by the General Assembly. Keeping in mind that it often takes more than one year for good ideas to be made into law, I plan to support similar legislation this year. One of the proposals I supported last year called for increasing the threshold amount for both new and renovation public works construction projects to $1 million, and to index the threshold for all municipal construction projects to the inflation rate. Another proposal called for stabilizing the impact of the prevailing wage law on the costs of long-term projects. Under this bill, the wage rate for public works projects subject to the prevailing wage law would be determined by the wage rates effective at the time of the bid, and would remain in effect for the duration of the project.

According to the Connecticut Conference of Municipalities (CCM), the General Assembly has not adjusted the project costs thresholds that trigger the prevailing law since 1991. Also, a report issued by CCM early last year contends that prevailing wages are considerably higher than average wage rates. Other experts and studies have also claimed that the prevailing wage law adds to the cost of public works projects.
The fact is that government is too expensive and we must be creative about cutting costs. While we can blame some of Connecticut’s ongoing fiscal problems on the national recession, we must also admit that state government’s penchant for overspending has not helped our situation. A very important key to solving our fiscal problems lies in shrinking the size and cost of state government, and in alleviating the impact of unfunded and underfunded state mandates on municipalities. Reforming our state prevailing wage law would be a good start.

As always, I welcome the opportunity to discuss the issues that are important to our state. Please feel free to share your concerns about our state budget problems, and your ideas for solving them. I can be reached at my legislative office in Hartford at 1-800-842-1421, or via e-mail to [email protected].