What You Need to Know About the Initiative to Repeal Prevailing Wage

If sponsors gather enough signatures in time, then legislature votes

As part of the negotiations to get Proposal 1 on the May 5 ballot, Gov. Rick Snyder reportedly promised to veto a potential repeal of the state's “prevailing wage” law. This law prohibits awarding government construction contracts to the lowest bidder, unless the contractor pays the equivalent of union wages that often exceed market rates. Studies have shown that this adds hundreds of millions of dollars annually to the cost of government infrastructure projects, including school construction and road repairs.

Snyder has not denied those reports, and even though voters turned down the proposed sales tax hike in May, there are still concerns that he may feel bound by the alleged deal and veto a prevailing wage repeal bill that has already passed the Senate.

That’s the back-story behind an announcement that the Bureau of Elections has approved petition language submitted by a coalition, calling itself “Protecting Michigan Taxpayers,” which wants to repeal the prevailing wage law through a process called “initiated legislation.” As prescribed by the state constitution, this allows a new law to be enacted (or an old one repealed) by a vote of the people and the Legislature, and “over the head” of a governor.

Here’s how it works:

Michigan’s constitution provides three ways for citizens to change the law, or “take the initiative.” The first is an initiative to amend the constitution itself, which requires gathering signatures from registered voters equivalent to 10 percent of the total votes cast in the last election for governor. Doing so places the proposal on the next general election ballot for an up-or-down vote by the people.

The second is a referendum on a law passed by the Legislature. By gathering signatures equal to 5 percent of the votes cast for governor, a group of citizens place a new law “on hold” until voters decide on it in the next general election. Lawmakers have, though, exploited a loophole that bans referendums on appropriation bills — they simply add a modest appropriation to controversial new laws, making them "referendum proof." But that’s another story.

The third method is the one being used in the effort to repeal Michigan's prevailing wage law. It requires sponsors to gather signatures in favor of a proposed statute equal to 8 percent of the votes cast in the last governor election. (According to Ballotpedia that currently means 252,523 signatures.) Sponsors have a 180-day window to collect signatures.

If sponsors gather this number, the measure is placed before the Legislature for an up-or-down vote within 40 days, with no amendments allowed and — critical in this instance — no approval from the governor required.

If a simple majority of those elected and serving in both the House and Senate vote in favor, the measure becomes law with no further action required. The new law can only be amended by future legislatures with a supermajority vote of three-quarters in both the House and Senate.

If the Legislature does not approve the initiated legislation, then it is put to voters in the next general election. The Legislature can also place a competing alternative on the ballot, and the one that gets the most votes over 50 percent becomes law.

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.