Raising Prevailing Wage Threshold Good for Cities, Towns
Helping Connecticut cities and towns keep their costs down and encouraging more economic development are some of the positive results that can come from a proposal in the Labor Committee.
This week, CBIA testified in favor of SB 990, which reforms the prevailing wage mandate by raising the thresholds for municipal projects to $800,000 for new construction (up from $400,000) and $200,000 (up from $100,000) for refurbishing, repairing, remodeling, and rehabilitating projects.
Prevailing wage mandates dictate that companies doing business with municipalities must pay their employees wages and benefits according to a formula largely based on union wage scales.
The mandate has serious unintended consequences—making government projects more expensive and giving private-sector businesses a significant reason to avoid doing business with the state.
Given the increasing costs of construction materials and labor, and the budget crunches facing state and local governments, it is time to adjust the thresholds.
A survey conducted by CBIA in 2009 found that municipal leaders consider the prevailing wage to be among the most burdensome mandates they face.
The proposal partially relieves the costs and administrative burden of a prevailing wage project (estimated to be about 21% more than non-prevailing wage by CCM) to dozens of municipal and state development projects that require new or supplemental construction.
Connecticut needs to do the best it can to limit the cost of publicly funded construction. SB 990 is a good first step for relatively inexpensive construction undertakings.
For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or firstname.lastname@example.org.
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