Broad Prevailing Wage Mandate Could Drive Up Project Costs

Legislation heard in the Senate Finance Committee this week would impose prevailing wage requirements on local public works projects, increasing projects costs and affecting the number of projects budgeted each year. As introduced, HB 1098 would have lowered the prevailing wage threshold to 25%. But as amended by the House, the bill would now require prevailing wage rates to be paid for a local project receiving any amount of State funds. From MACo’s testimony:

This “one size fits all” approach would significantly undermine a local government’s ability to fund and manage its capital budget, especially those smaller in size and in more rural areas of the state. Local governments receive State support in varying amounts for a number of public works projects, including school construction, transportation, jails, and recreation facilities. The bill’s fiscal note forecasts a project cost increase, and local comparisons of school construction project bids in Howard and Washington Counties show even more substantial cost increases. Imposing a State-mandated cost increase on primarily locally funded projects reduces their affordability, and means fewer such projects can be supported.