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Prevailing Wage Law Costs School Districts Extra

By Andrew Staub
The Pennsylvania Independent

HARRISBURG PA – When the Central York School District wanted to repair the roof on a middle school about two years ago, the school board found itself playing a game of financial chicken.

The roof had to be repaired before students returned for the 2012-13 school year, school board member Gregory Lewis recalled this week.  Central York, however, thought it had a chance to save thousands of dollars if it waited until state lawmakers followed through on proposed changes to the state’s prevailing wage law. It requires school districts to pay higher wages for public works projects exceeding $25,000.

Prevailing Wage Law Costs School Districts ExtraLawmakers didn’t change the law, and it cost Central York taxpayers big time, Lewis said. The district ended up paying about $65,000 more than what the contractor would have accepted without prevailing wage, he said.

It doesn’t make sense to Lewis, not when he’s trying to hold the line on property taxes for residents who must foot the bill for construction projects.

“Now — despite what anybody says — times are still hard, and we’re looking to save money anywhere we can,” Lewis said. “To me, this is just such a glaring example of overspending.”

State Rep. Jesse Topper, a Bedford County Republican, agrees. He’s making a last-minute push this legislative session to eliminate the prevailing wage requirement for school districts’ public works projects. Topper was inspired to introduce his legislation after touring schools in his district upon taking office earlier this year.

Several superintendents said the law increased costs by as much as 30 percent, and some schools were delaying projects because of the prices, Topper said. “Every district superintendent told me the same thing, that this is one of the biggest cost drivers of their budget,” he said.

The issue takes on greater meaning, Topper said, as school funding, property taxes and escalating pension costs dominate discussion at the state level. Prevailing wage also needs to be part of the conversation, he said.

While some believe eliminating prevailing wage could save anywhere from 5 percent to 30 percent, Topper referenced a 2001 study from the Journal of Education Finance that found districts’ construction labor costs were 17 percent higher when compared to private-sector wages.

“It all comes back to what can we do to make sure our school districts have the funds they need, and this is an important part of that,” Topper said.

Prevailing wage has been a target before, but school districts have missed out on relief.

Last year, as part of a $2.3 billion transportation funding law, state lawmakers raised the prevailing wage threshold for locally funded highway and bridge projects to those in excess of $100,000, but the law did not affect other municipal projects or school district public works projects.

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