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Republicans rally against wage provisions in budget

Dustin Block
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Opponents are pessimistic they’ll be able to remove a state budget provision that would require prevailing wages for any project that receives $2,000 or more in state money.

The current threshold is $248,000.

“I’m confident we can point this out for the governor and Democrats to reconsider, but it’ll probably pass, along with other bad things,” said state Rep. Robin Vos, R-Caledonia.

Gov. Jim Doyle’s budget would require contractors to pay prevailing wages — a wage set by the Department of Workforce Development based on contractor surveys of payment on private projects — for projects worth more than $2,000 that receive state money.

It also would require private projects that receive public money to pay prevailing wages and would eliminate a $250 fee to file a prevailing wage complaint with the state, unless the claim was deemed frivolous.

At issue is whether contractors should be forced to pay the prevailing wage on publicly paid for jobs or set their own rates.

Opponents of the provision said the state budget, as proposed, would essentially require contractors to pay a prevailing wage on any project — public or private — that receives public money.

Proponents of the proposal, on the other hand, said it would bring Wisconsin in line with the federal Davis-Bacon Act.

State Rep. Mark Gottlieb, R-Port Washington, said paying workers prevailing wages likely will increase project costs and make it more difficult for developers to create jobs.

“This is the wrong time to be increasing the cost of projects,” said Gottlieb, who called the proposal a “job killer.”

Gottlieb and other Republicans said they hope to swing a few Democrats in the state Assembly or Senate against Doyle’s proposal, which is backed by labor organizations. Democrats control the Assembly and Senate, giving them control of the state’s budget process.

Vos, a leading Republican in the Assembly, called the proposals “truly awful.”

“This is taking away flexibility in the middle of the worst economic crisis in my lifetime,” he said. “If you have $500,000 for a project and you’re forced to pay a prevailing wage, you’re going to employ fewer people. I’d rather have more people at work.”

Gottlieb’s main concern is the broadness of the proposal.

With a $2,000 threshold, he said it basically would require any development receiving any type of government assistance to pay prevailing wages. That could include projects paid for with industrial revenue bonds or located in tax-incremental finance districts.

TIF allows municipalities to borrow money to pay for infrastructure improvements. Money that would ordinarily pay property taxes on the land is diverted from the tax roll to pay off the loan.

Gottlieb said he is working on legislation to overturn a Feb. 20 Department of Workforce Development ruling that requires contractors to pay prevailing wages on infrastructure projects that serve their private projects. He said he hopes to pass the bill this year.

Supporters of the wage requirement say it is long overdue, pointing out it would bring Wisconsin in line with the federal act that requires a prevailing wage on all federal projects worth more than $2,000. Given the stimulus money headed to the state, now is a good time for the state to step up, said Robb Kahl, executive director of the Construction Business Group.

“I think the governor did the right thing here, without question,” he said. “If taxpayers are going to be paying for something, you’re going to comply with the law.”

Terry McGowan, business manager of International Union of Operating Engineers Local 139, said, “All the governor did was follow the federal Davis-Bacon guideline. There’s federal money in everything under the stimulus package. The federal standards were going to apply anyway.”

Supporters also point out Doyle’s proposal resembles provisions already in place in Minnesota, Iowa and Michigan.

Despite long odds, opponents say they hope to remove the prevailing wage items from the budget. John Mielke, vice president of Associated Builders & Contractors of Wisconsin Inc., said the issue was one of ABC’s top priorities heading into state budget negotiations. He described the proposal as “counterintuitive” to the idea of jump-starting the economy.

“We believe this will have a significant dampening effect on economic development in the state,” Mielke said.

Supporters say they hope the bill survives the budget process.

“If people are looking for a fight, there are a lot of other issues to fight over,” McGowan said. “This one is about treating taxpayers fairly.”

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