News Story

Is State's Prevailing Wage Law at Risk of Being Tossed?

A citizen initiative would trump Gov. Snyder's promised veto on any repeal legislation

The deck could soon be stacked in favor of repealing Michigan’s prevailing wage law. On Tuesday, the Board of State Canvassers approved language for a citizen initiative to repeal the law, which the Anderson Economic Group notes costs taxpayers more than $224 million annually extra for schools and more for local governments and roads.

Gov. Rick Snyder reportedly pledged not to sign a prevailing wage repeal as part of the bargain he made to garner enough legislative votes to put the now-defunct Proposal 1 on the May ballot. A citizen initiative to repeal the prevailing wage would take the governor out of the equation. If a sufficient number (252,523) of valid signatures were collected within 180 days and both the House and Senate then passed a repeal within 40 days, it would go into effect automatically.

“We’re very serious about this,” said Chris Fisher, president of the Associated Builders and Contractors of Michigan and a member of Protecting Michigan Taxpayers, the coalition sponsoring the initiative. “The Board of Canvassers’ action means we can start collecting signatures. We plan to start collecting them within the next two weeks.”

Protecting Michigan Taxpayers is the same group that led the successful campaign to defeat Proposal 2 in 2012, which would have enshrined a union collective bargaining mandate in the state constitution.

Fisher was asked how confident initiative sponsors are of having enough votes in the Republican-controlled Legislature to repeal prevailing wage, assuming sufficient signatures can be collected.

“We’re very confident,” Fisher said. “Both the Senate and House Republican caucuses have made repealing the prevailing wage a top priority. We wouldn’t be doing this if we weren’t confident.”

Fisher also said that even though the citizens initiative is under way, it does not preclude the Legislature and governor from reaching an agreement to enact a repeal, making the initiative moot.

“There is no reason why the Legislature and the governor couldn’t work together concurrently to do the repeal while the initiative goes forward,” Fisher said.

Snyder reportedly pledged not to sign a repeal of the prevailing wage, but so far as is known he did not pledge to veto such a measure. The governor and Legislature could potentially strike a bargain (for instance, as part of a road funding deal) under which the Legislature passed the prevailing wage repeal and the governor allowed it to take effect without his signature. (Under Michigan law a governor does not have to sign a bill for it to become law.)

On May 14 the Senate passed a three-bill package, Senate Bills 1, 2, and 3, to repeal the prevailing wage and sent it over to the House. However, unless the Legislature and Snyder have agreed in advance on getting the legislation enacted, the governor could still veto it. That’s why Protecting Michigan Taxpayers is moving ahead with the citizen initiative to create the "insurance policy" of an alternative pathway to a repeal of the prevailing wage.

“Prevailing wage policies raise the price of government construction,” said James Hohman, the assistant director of fiscal policy at the Mackinac Center. “It’s a bad deal for citizens and any way they get this repealed will pay off for residents.”

Michigan’s prevailing wage law forces government and publicly funded entities to pay a set minimum wage for workers based on union contracts when contracting for construction work. It was signed into law by former Gov. George Romney in 1965.

Fisher was asked if there has been any organized opposition to the citizen initiative so far.

“No,” Fisher responded.

Typically, with any signature-gathering effort the goal is to collect many more signatures than the required number, as a protection against possible challenges.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.