Reforming An Unjust Law Doesn’t Make It Just
June 17, 2015
by Nick Novak[Madison, Wisc…] A little over four years ago, Wisconsin lawmakers took bold action to protect current and future taxpayers from the high costs associated with restrictive collective bargaining laws. Since then, Act 10 has proved to be an unquestioned success at every level of government.
While the decision to pursue such reforms was met with boisterous opposition – including two rounds of recall elections – our elected leaders in Madison did what was best for the state’s financial future, ignoring the fact that it could cost them their political future.
But, the decision to stand up for taxpayers in the face of such adversity paid off. Wisconsin has saved $3 billion because of Act 10, and the politicians on the right side of history were rewarded with reelection.
The time for big and bold reforms is not over, though. Wisconsin is still harmed by outdated policies that cost taxpayers hundreds of millions of dollars a year. One such policy is prevailing wage. While it may sound good on the surface, prevailing wage artificially increases the costs of public projects by double digits.
In the Village of Grafton, taxpayers had to pay an additional $260,000 for painting and maintenance of two water towers because of prevailing wage. In Vilas County, the cost to build a six-mile ATV trail off of Highway K jumped from $180,000 to $330,000. In both cases, no extra work was done – the bill just got bigger.
According to the non-partisan Wisconsin Taxpayers Alliance (WISTAX), taxpayers pay up to $300 million a year in additional costs because of prevailing wage. The study says the law increases costs for taxpayers by nine to 13.5 percent on average.
Opponents of repealing prevailing wage discard these facts and data as unreliable and inaccurate. These opponents claim prevailing wage does not lead to higher costs and that it protects taxpayers from lower quality work.
If we take their claims at face value, we as taxpayers would expect costs to stay the same and quality to drop exponentially in states that have repealed prevailing wage. Luckily, our friends in Ohio repealed prevailing wage for school districts in 1997. And guess what, the state’s non-partisan Legislative Service Commission (LSC) did a study on the actual impacts of the repeal five years later.
The results of the repeal for school districts? Taxpayers saved big money and the overall quality of projects stayed the same.
In the five years following Ohio’s repeal of prevailing wage for school districts, the overall cost of school construction dropped by $487.9 million – or an average of 10.7 percent. This is right in line with WISTAX’s report on savings that could be seen in Wisconsin.
In addition, the LSC’s report found that repealing prevailing wage for school districts “had little impact on the quality of public school building construction” in Ohio.
A Wisconsin contractor – who opposes the repeal of prevailing wage – also admitted during a public hearing last month that the quality of his company’s work is the same whether they are on a prevailing wage job or a non-prevailing wage job.
Based on this ever-growing body of evidence, it is clear that prevailing wage is simply a protectionist policy for the union contractors in Wisconsin. It artificially inflates the cost of public projects for taxpayers and does nothing to guarantee the quality of work.
If legislators want to continue to be on the right side of history, they should think long and hard about the impacts prevailing wage has on the taxpayers they represent.
Novak is the Director of Communications at The John K. MacIver Institute for Public Policy.