MADISON — The Legislature’s budget-writing committee approved a spending plan on Tuesday night that would eliminate Wisconsin’s prevailing-wage laws for state projects starting on Sept. 1, 2018.
That change would come on top of the repeal for local projects that was approved in 2015 and took effect at the beginning of this year. Proponents of full elimination have argued that it would help lower the cost of public projects and make scarce tax dollars stretch just a bit further.
John Mielke, president of the mostly non-union Associated Builders and Contractors of Wisconsin, called lawmakers courageous for moving to repeal what he deemed “Wisconsin’s anti-competition, anti-small business prevailing wage law.”
“Thanks to their willingness to finish the job they started last legislative session, Wisconsin will benefit from quality construction through the more effective use of tax dollars,” Mielke said in an official statement.
Prevailing-wage supporters countered by arguing there is no solid evidence suggesting the savings from repeal will be substantial. Terry McGowan, president and business manager of the International Union of Operating Engineers Local 139, noted that the state’s nonpartisan Legislative Fiscal Bureau has conducted a survey of studies looking into how prevailing wages affect construction costs. Rather than provide a firm answer, the fiscal bureau found the studies’ results were “mixed and inconclusive.”
McGowan said he wonders what sort of message state officials think they are sending when they vote to eliminate a prop of construction wages not many months after increasing their own compensation. State senators decided in February to increase the per diem payments they get for working a day in Madison from $88 a day to $115 a day. Similarly, lawmakers in the state Assembly changed their per diems in a way that will allow to them claim an additional $1,380 a year.
“And last year, they worked through February and adjourned and then didn’t come back until December,” McGowan said. “That’s nice work.”
For prevailing wages to be eliminated on state projects, the proposal still must be approved by the full Senate and Assembly and signed by Gov. Scott Walker. So far, the support that the governor and his fellow Republicans in the Legislature have shown for repeal makes the chances slim that the effort can be turned back now.
Still, even with prevailing wages gone on state work, most big road projects will continue to fall under a federal form of prevailing wages. Any work that receives federal money – which is true for the bulk of the major road projects in Wisconsin – would still have to pay the wages mandated by the Davis-Bacon Act.
Also on Tuesday, the committee passed a road-funding plan that would borrow about $400 million, raise fees on electric and hybrid vehicles, further study toll roads for interstates in Wisconsin and not increase the gas tax.
The Joint Finance Committee deal, reached between Senate and Assembly Republicans but without Democratic support, came as the panel was moving to complete its work on the state’s $76 billion budget, which is two months past due.
Committee co-chairs Rep. John Nygren and Sen. Alberta Darling both expressed disappointment that they failed to reach a longer-term plan for transportation spending, a perennial need caused by deteriorating roads and not enough incoming fuel tax to pay for planned projects. Republican Gov. Scott Walker refused to sign off on a gas-tax increase, and instead called for delaying road work and borrowing more.
“This is one that’s left unsolved,” Nygren said, while defending the plan for making progress.
Democrats said Republicans failed.
“This is a bipartisan problem but this is a very partisan solution that doesn’t do anything,” said Democratic Sen. Jon Erpenbach of Middleton. “It doesn’t fix anything, it makes things worse.”
The transportation deal would borrow roughly $402 million for roads, including $250 million first proposed in a separate bill for the reconstruction of Interstate 94 from Milwaukee south to the Illinois border. That is about $100 million less in borrowing than Walker had called for.
There would be no new money for two massive interstate projects in the Milwaukee area – one that would rebuild I-94 between the Marquette and Zoo interchanges and complete the northern leg of the massive Zoo Interchange reconstruction project. There could be other delays on road projects, but there were no immediate details.
Separately, there would be $144 million to expand I-94 to six lanes along 7.5 miles in St. Croix County in western Wisconsin on a trucking route into the Twin Cities.
Darling said she was “very disappointed” that there would be a delay in finishing work around Milwaukee, calling it short-sighted.
“We’re going to have orange buckets up all over the place for years,” she said.
The budget plan also included a new $100 fee on electric vehicles and $75 for hybrid vehicles. That would come on top of the usual $75 fee for vehicles now. The argument is that electric- and hybrid-vehicle owners pay less of their share in gas taxes but still use the same roads that depend on money from the gas tax to be maintained.
The new fees would generate about $8.4 million over the next two years.
The state would spend $2.5 million studying the possibility of interstate tolling, with a report due to the Legislature in 2019. Tolling would require federal approval. Republicans were also calling for limiting local government oversight of quarries primarily used for public-works or private construction projects. It would not apply to frack-sand mines.
The committee also voted to cut 200 positions at the state Department of Transportation.Follow @TDR_WLJDan