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02/24/2020 04:50 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20190&cosponId=29636
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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: May 22, 2019 01:56 PM
From: Senator Kristin Phillips-Hill
To: All Senate members
Subject: Prevailing Wage Options for School and Municipal Construction
 
In the near future I will introduce legislation that will grant Commonwealth school entities and municipalities the option to choose whether they wish to follow the existing Pennsylvania Prevailing Wage Act requirements or pursue an alternative which they believe would better serve their constituents' interests.

Unlike bills introduced in prior sessions which sought to prohibit the use of the Pennsylvania Prevailing Wage Act by school districts, this legislation will simply give our local school and municipal leaders a choice among many options including continuing adherence to the provisions of the Prevailing Wage Act. This legislation will also provide for a five-year monitoring study by the (Legislative Budget and Finance Committee or the Joint State Government Commission) on the effects of the legislation on school and municipal construction costs, with results reported to the Legislature at the study’s conclusion.

When Ohio passed legislation to exempt school construction from Ohio’s prevailing wage requirements, a non-partisan report by the State of Ohio Legislative Service Commission “found indications of $487.9 million in aggregate savings, a savings of 10.7%” over a five-year period. Moreover, a published study of the compliance costs of Pennsylvania’s Prevailing Wage Act on public works projects for school districts from 1992-1997 reported nearly $67 million dollars in additional cost even after state reimbursement.

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 Pennsylvania study published in the Journal of Education Finance), an additional $700 million could have been used to develop or improve educational programs or could have remained in the hands of taxpayers.

Local elected officials serving in municipal and school leadership roles are most cognizant of the needs and wishes of the residents and communities they represent. Among their important responsibilities is to provide sound fiscal stewardship of our limited taxpayer resources when building our local schools and municipal facilities. Let us allow them the option to pursue the construction options they and their constituents deem best.

Please join me in cosponsoring this important piece of legislation.



Introduced as SB838