Thank goodness for the veto pen.
Gov. Brian Sandoval used that veto pen this past week to block an attempt by Democratic lawmakers to rollback a modest cost-saving measure passed by the Republican-controlled 2015 Legislature.
Assembly Bill 154 would have raised the cost of construction of university and public school buildings by reimposing the so-called prevailing wage on more projects.
Prevailing wage laws require that workers on public construction jobs be paid no less than the “prevailing” wage in the area where the work is being done. The wage rate is set by the state Labor Commissioner based on a survey of contractors. The survey is so time consuming that in reality only union shops bother to comply, meaning the prevailing wage is the highest union wage.
AB154 would have also required that contractors doing any university or public school work exceeding $100,000 pay prevailing wage, down from the current $250,000. It also requires the full prevailing wage instead of the current 90 percent for school projects. Both the lower threshold and the lower percentage were approved in 2015.
At one point in the 2015 legislative session, a bill was passed to remove the prevailing wage requirement for schools entirely, but in an 11th-hour deal to get Democrats to support Sandoval’s tax hike the $250,000 threshold and the 90 percent of prevailing wage were approved.
Sandoval pointed out in his veto message that the measure would add costs for school construction and reduce the value to the recently voter approved sales tax increase in Washoe County to build new public schools.
“Stakeholders and lawmakers compromised in 2015 to propose moderate, but necessary reforms that I supported,” he wrote in a veto message, according to news accounts. “There is no superseding change today that justifies the rollback of this compromise.”
During testimony about the bill, Warren Hardy of the Associated Builders and Contractors pointed out that a contract for construction of a middle school in Clark County received a low bid of $2.7 million during that brief period a couple of years ago when it looked like the prevailing wage requirement would be dropped for schools, but when the prevailing wage was reinstated the low bid jumped to $3.6 million.
The Nevada Policy Research Institute in its “Solutions 2015” handbook estimated the law required the state, cities, counties, school districts and other government entities to pay 45 percent higher wages for public construction projects than necessary — a cost to taxpayers of $1 billion a year.
The better outcome, of course, would have been to repeal all requirements for prevailing wages on public construction projects, but with Democrats in the majority that is not likely to happen. AB154 passed both the Senate and the Assembly on a straight-party-line vote, all Democrats in favor and all Republicans opposed.
Sandoval did the right thing in vetoing this bill. — TM