Legislation Will Help Local Governments Keep Construction Budgets Under Control, Says Millard

HARRISBURG - In an effort to help counties and municipalities all over Pennsylvania stave off the need for tax increases, the House Labor and Industry Committee today passed legislation sponsored by state Rep. David R. Millard (R-Millville) to adjust the cost threshold for public works projects.

The Prevailing Wage Act of 1961 established “prevailing” minimum wage rates that must be paid on public construction projects.  Currently, the rates established under the act reflect union wage rates that often are not representative of the actual wage rates paid in the county.

“Local governments all over Pennsylvania struggle with the crushing financial recourse caused by the archaic prevailing wage act,” Millard said. “Every municipality, even the small ones like we have in Columbia County, are forced to pay Philadelphia-level union wages to contractors for any public works project that costs more than $25,000. My bill will substantially raise that cost threshold.”

Specifically, Millard’s bill, House Bill 796, raises the threshold from $25,000 to $75,000.  It was amended in the House Labor and Industry Committee by Rep. Fred Keller (R-Union/Snyder Counties) to boost the threshold to $100,000.  The bill passed in committee, as amended, by a vote of 15-10.

“The threshold level of $25,000 was set when the Prevailing Wage Act was passed in 1961.  If the standard inflationary rate was applied to that number, the equivalent cost today would be almost $190,000,” Millard said. “It’s a huge rarity for any needed municipal construction project in 2013 to cost less than $25,000. Adjusting the cost threshold to $100,000 is a very reasonable, middle-of-the-road approach for us to help municipalities keep costs under control.”

Millard noted that small municipalities, especially in rural areas, may not have many manufacturers or businesses to help boost their tax base. “Rural counties and municipalities may have no choice but to raise taxes to meet the overly burdensome demands dictated by the Prevailing Wage Act,” Millard said. “It’s high time for us to modernize this approach and enable our local governments to pay fair costs for necessary construction projects.”

The legislation now proceeds to the full House for consideration.

Representative David Millard
109th District
Pennsylvania House of Representatives
Media Contact:  Diane Moore
RepMillard.com / Facebook.com/RepMillard