On Monday, February 16, the House Labor Committee approved HSB 149, the prevailing wage bill. The bill requires a contractor to pay workers the same hourly wage plus fringe benefits for certain public improvements as the contractor would pay workers for a private construction or improvement project. The bill allows the per-hour wage rate to be based on what is normally paid in the area by contractors for similar projects, and to be adjusted on a yearly basis by the department of workforce development.The bill includes specific criteria, such as cost of the public improvement and the population of the city or county, for the project to qualify for the prevailing wage rate. The wage rates that the workers must be paid shall also include benefits such as medical care, life insurance, overtime pay, and vacation and holiday pay. The bill applies to any public improvement that receives money from a public body and includes most types of public improvements from construction to road maintenance.
The Fiscal Note from 2007 stated that Workforce Development would need $889,000 and 11.0 new FTEs, the Board of Regents would need $556,000 and 6.0 FTE positions in order to comply with the bill. In addition, construction cost estimates by the Board of Regents, Iowa State Association of Counties, and the Iowa Association of School Boards all indicate an approximate 10 percent to 12 percent increase in project costs due to prevailing wage.
In 1997, Ohio repealed its prevailing wage law for new school construction. According to the Ohio Legislative Budget Office, the change resulted in a 10 percent decrease in project costs while having virtually no impact on the quality of the construction. In addition, worker wages increased at a 77 percent greater rate than when prevailing wage was used.
According to the Iowa Association of Counties, county governments spend $150 million annually on projects. They project an increase of 10 to 20 percent on project costs, which would increase annual costs by $15 million to $30 million, not counting the additional administration expense.
According to the City of Des Moines, they have 71 projects worth $60 million. A conservative 5 percent increase would mean $3 million in additional costs, not counting the additional administration expense.
Question of the Week
One of the proposals being discussed this year is the "National Popular Vote!" plan which would have Iowa elections support which ever presidential candidate wins the popular vote in the country. Because Iowa is a small state, it would reduce our clout & result in us losing "first caucus in the nation status. Do you support this proposal?
Everyone agrees that workers deserve to be paid fair wages. However, this legislation is not fair for the workers or the contractors. Iowans pride themselves on hard work and honesty. This legislation is attempting to address a problem we do not have. HSB 149 places an undue burden on local governments and will undoubtedly cause an increase in property taxes or a scaling back of public works projects. Many rural contractors will no longer be in business if this legislation is passed.
HSB 149 was approved on a party-line vote.
House Republicans will judge every bill this session with the question "Does this bill help grow Iowa's economy?" Prevailing wage mandates will hurt Iowa's economy and will be opposed by the caucus.
State is Purposely Raising Electric Rates to Force Change
Doubling electric rates and implementing energy efficiency mandates may be part of Iowa's energy future, according to Iowa Power Fund Board Chairman Fred Hubbell.
Change was the mantra of the previous election. Electric rates are increasing, mostly because the state sees that as the only way to force change on people, said Hubbell, who was appointed by Iowa Governor Chet Culver.
"We as consumers will not change unless there are some kind of mandates to take us in that direction," Hubbell said during his speech at the Iowa Association of Electric Co-operatives. He also said he believes that electric rates have been held artificially low and that making electricity more expensive will help reduce demand for electricity. Hubbell, the Iowa Power Fund Board and the Iowa Office of Energy Independence are developing the state's energy independence plan, which will then be submitted to the Iowa Legislature and Gov. Culver for review and consideration.
An interesting exchange took place in Environmental Protection Committee this week. Dr. Gerald Schnoor, Chair of the Iowa Climate Change Advisory Council, gave a presentation. During the Q & A portion, Rep. Chris Hagenow of Clive asked why it is O.K. that India and China continue to burn carbon and pollute the air but it is not acceptable here. The professor answered that it is all about the inequity between our countries and it is time to level the playing field. How Interesting!!
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