School Construction Officials Express Concerns Over Prevailing Wage Law

The Board of Public Works (BPW), composed of Governor Larry Hogan, Comptroller Peter V.R. Franchot, and Treasurer Nancy K. Kopp, approved $130 million in school construction projects yesterday, bringing the total amount of state funding for school construction projects to over $318 million for FY 2016.

During discussions on this agenda item, school construction officials raised concerns with the increasing cost of school projects.  David Lever, Executive Director of the State’s Interagency Commission on School Construction, stated that the improving economy and regulatory environment are having an effect, but the major concern is the State’s prevailing wage law. He said that “prevailing wage rules coupled with labor requirements that mandate the hiring of more highly paid journeyman workers could drive up costs between 8 percent and the teens in the next year.”

Under current law, school construction projects of $500,000 or more, funded with at least 25% of state funds are required to follow prevailing wage requirements. Previously set at 50%, legislation during the 2014 session lowered the threshold to 25% for school construction projects expanding the laws application.

In his comments to the BPW, Mr. Lever stated that, based on comparative research, prevailing wage rules could increase the costs of contracts by up to 11%.

Supporters of prevailing wage argue that the benefits of well-paid, skilled workers outweigh the increased contract costs.

This blog post summarizes an article published in the Daily Record. For full access to the article, please subscribe to the Daily Record.

Board of Public Works Agenda including Final Actions (School Construction begins on agenda page 20)
Board of Public Works Agenda Summary Item