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Senate of Pennsylvania
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted:	January 29, 2015 10:11 AM
From:	Senator Scott Wagner
To:	All Senate members
Subject:	Prevailing Wage School Exemption

In the near future I intend to introduce legislation that would exempt Pennsylvania school districts, as well as any authority, instrumentality, or agency established by a school district, from the requirements of the Prevailing Wage Act. The Prevailing Wage Act requires that all public bodies pay the prevailing minimum wage, as determined by the Secretary of Labor and Industry, to workmen on a “public works project.” A “public work” is defined in the Act as any construction, repair, demolition, or alteration paid for in whole, or in part, out of the funds of a public body where the total estimated cost exceeds $25,000. Because school construction and renovation projects are so costly, school districts are hit particularly hard by the prevailing wage mandate. A 2001 study by the Journal of Education Finance examining the effect of Pennsylvania’s prevailing wage law on school construction found that school districts paid 17% higher labor costs under the Prevailing Wage Act when compared with private sector wages for all labor classifications. According to the Department of Education’s PlanCon documentation, Pennsylvania school districts spent over $7 billion on school construction and renovation projects that were bid between February 2000 and May 2010. If school districts were to save 10%-17% of the construction costs on these projects (as suggested by the aforementioned Journal of Education Finance study), an additional $700 million could have been used to develop or improve educational programs or could have remained in the hands of taxpayers. To maximize the value of every taxpayer dollar and ensure Pennsylvania students are given the quality educational opportunities they deserve, we must give our school districts flexibility to forego burdensome, outdated requirements so that they may keep costs down and balance their budgets. If you have any questions regarding this proposal, please contact Jason E. High at 717-787-3817 or jhigh@pasen.gov.

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