Testifiers Say Road Repairs, Building Projects Delayed by Prevailing Wage Law
9/17/2013

Hearing highlights local financial problems, costs to taxpayers and law modernization

HARRISBURG – Pennsylvania’s prevailing wage rates increase the total cost of construction projects by 10 percent to 17 percent on average, thereby causing Pennsylvania’s taxpayers to consistently overpay for their public infrastructure by millions of dollars each year, according to testimony of municipal and business officials at a hearing before the House Labor and Industry Committee in Johnstown, Cambria County, on Monday.

“We can’t continue to burden our taxpayers with more expenses on school, bridge and road construction projects across Pennsylvania,” said Rep. Fred Keller (R-Snyder/Union), who presided over the hearing.  “Our workers should receive a fair wage, but it shouldn’t penalize our taxpayers.”

Those who testified included township managers, supervisors, a county commissioner, a city manager and union officials.

“By allowing a higher threshold and allowing a maintenance exception before applying prevailing wage requirements, local governments will be better able to meet the needs of our community,” said Daniel Penatzer, Ebensburg Borough manager.  “We can better use our taxpayers’ hard-earned dollars and we can provide cost savings by reducing unnecessary bureaucratic requirements.”

Richland Township Supervisor Bob Heffelfinger agreed, saying, “It is simple logic.  When we had big jobs, they weren’t as expensive as they are now with prevailing wage.  It doesn’t speak about the quality of work, or a question of union vs. non-union, but bottom line is that prevailing wage drives the cost up.  It hurts businesses, and hurts employment.”

“This threshold was set in 1963 and has not been adjusted since,” said Keller.  “It’s time we give the local governments the opportunity to determine the projects they want to get done.”  

Kristen Denne, manager for the City of Johnstown, said, “Our unemployment rate is at 13 percent and the economy is not good.  We have to pass on many projects because we cannot pay prevailing wage.  This hurts the people of Johnstown who need jobs.  Many of our residents are leaving the city because they cannot find work.”

Pennsylvania’s Prevailing Wage Act requires municipalities and school districts to pay the “prevailing minimum wage” to those individuals working on public construction projects. The Prevailing Wage Act does not specify how the “prevailing minimum wage” in a locality is to be determined, and the act leaves much discretion to the secretary of Labor and Industry in opting to use the area union wage rates as the prevailing wage to be paid on public projects. It is argued by Prevailing Wage Act reform proponents that union wage rates are more comparable to wage rates paid in larger cities and often do not reflect the actual prevailing wages paid in rural areas. Reform advocates believe that basing prevailing wage rates in rural counties on union wage rates inflates the costs of public projects.

This was the third hearing held by the House Labor and Industry Committee on Pennsylvania’s Prevailing Wage Act.  An additional hearing is scheduled for Williamsport, Lycoming County, on Sept. 26.

Representative Fred Keller
85th District
Pennsylvania House of Representatives
Media Contact:  Ty McCauslin
717.772.9979
tmccausl@pahousegop.com
www.RepKeller.com
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