(Robert Davis) – Nevada’s Assembly Committee on Government Affairs heard testimony on Tuesday on a bill that would exempt certain small construction projects for state agencies from paying prevailing wages.
Assembly Bill 99 was introduced by Assemblyman John Ellison, R-Elko, in February. The bill would increase the minimum value required to pay prevailing wages on projects of the Nevada System of Higher Education (NSHE) from $100,000 to $250,000.
Ellison described the bill as a way to spur growth for small jobs like fixing sidewalks and potholes, and other projects that he says contractors aren’t bidding on.
“You cannot construct a building for less than $100,000, these are small projects, like rebuilding a small stretch of sidewalk,” Ellison said.
“By increasing the prevailing wage threshold, this bill will give cities, counties, and NSHE a little bit of operating room to get projects done, they normally would not be able to,” he added.
The bill has earned the support of 17 of Ellison’s Republican colleagues and the Nevada Policy Research Institute (NPRI), a free-market think tank.
Daniel Honchariw, NPRI’s legislative affairs director, said the bill will help “ensure our tax dollars are spent more wisely and go further.”
“These are not small dollars at stake, and prevailing wage laws result in our tax dollars being used in unwise and inefficient ways—ways that, for example, seem to impeach any claim that Nevada’s schools are underfunded,” Honchariw added.
An analysis of Nevada’s prevailing wage law by NPRI revealed the law requires non-union contractors to pay wages that are 60% greater than the market rate. It also found that the law created over $1 billion per year of wasteful tax dollar spending between 2009 and 2010.
Under state law, prevailing wages are set through negotiations with local trade unions. The law also allows government agencies to pay “Bona Fide Fringe Benefits” such as union dues to unions in the name of the employees who work on public projects.
Opponents to the bill charge prevailing wages are perfect examples to spending public money to best benefit the agency involved and the public.
Don Campbell, president of the Southern Nevada chapter of the National Electrical Contractors Association (NECA), said raising the dollar limits for projects to qualify for prevailing wage is detrimental to the law’s very purpose.
“Unfortunately, experience has shown that increasing the dollar amount for construction projects to qualify for prevailing wage, has proven to be detrimental—and causes unintended consequences—by allowing for misuse of public funds,” he said.
Last year, some union electricians in Clark County, Nevada received a $2.07 pay raise because of prevailing wage negotiations. Electricians who worked in school districts received a larger raise, going from earning $41 per hour to over $47.
Robert Davis | The Center Square contributor