Prevailing Wage Bill Will Capture Many More School Projects

Over MACo’s objections, the Senate Finance Committee voted 6 to 5 to lower the prevailing wage threshold for school construction projects from 50% to 25%.  With this change, all school construction projects that are funded with 25% or more State funds would be subject to the State’s prevailing wage law.

As introduced, SB 232 would have lowered the threshold to require prevailing wage rates to be paid for a local project receiving any amount of State funds.  MACo joined forces with the Associated Builders and Contractors of Metro Washington and the Maryland Association Boards of Education in opposition to the bill.  After committee deliberations earlier this week, the bill was amended to only apply to school construction projects and instead of eliminating the threshold, to lower it from 50% to 40%.  However, the bill was reconsidered today in the Senate Finance Committee and the threshold was lowered to 25%.

During the hearing on SB 232, MACo expressed concerns that lowering the threshold would increase project costs and affect the number of projects budgeted each year. MACo also referenced information provided to the Task Force to Study the Applicability of the Maryland Prevailing Wage Law that suggested that school construction projects bid with prevailing wage have an average cost increase ranging from 3% to 30% depending on the type of project.  When you look at all projects as a whole, the average cost increase when comparing bid day data for projects bid with and without prevailing wage is 10.6%.

A similar bill, HB 727, is being considered in the House Economic Matters Committee.

Discussion of the Task Force to Study the Applicability of the Maryland Prevailing Wage Law can be found on Conduit Street.  Due to a lack of consensus within the group, the Task Force did not take a position on the legislation being considered by the General Assembly.