Could a Backroom Political Deal Stop Prevailing Wage Repeal?
Unions are trying to cut a deal with business groups to prevent a repeal of the state’s prevailing wage law, according to a news account out of Lansing.
The idea is that business groups would use their influence on Republican lawmakers to halt a repeal measure that is likely to succeed in exchange for the unions dropping a proposed ballot initiative to nearly double the state’s main business tax.
Michigan 50-year-old prevailing wage law prohibits the state, local governments and public schools from awarding construction contracts to the lowest bidder unless the contractor agrees to pay union-scale wages on the project. It is estimated that the law costs Michigan taxpayers $224 million annually.
A campaign is now underway to gather signatures on petitions to repeal the law through a process called “voter initiated legislation.” If enough signatures are collected (at least 252,523 according to Ballotpedia), a repeal bill will go before the Legislature for an up-or-down vote. If it is not approved within 40 days, then the measure gets placed on the November, 2016 general election ballot.
At the same time, three unions — the Michigan Labor District Council, the Operating Engineers and the Michigan Regional Council of Carpenters and Millwrights — are collecting signatures for their own voter initiated law, one that would increase the state’s corporate income tax from 6 percent to 11 percent. This is dead-on-arrival in the GOP-controlled Legislature, but might have a chance on a statewide general election ballot.
Not surprisingly, business groups would rather not have to raise money for a campaign against a major tax increase on the ballot. For their part, unions see the prevailing wage law very likely getting repealed soon thanks to another voter initiated campaign now underway. Put the two together and you get “let’s make a deal” talk.
It wouldn’t be the first time. In 2014, influential state business groups working with Republican legislative leaders reportedly agreed to legislation increasing the state’s minimum wage mandate, with the goal of keeping a draconian wage hike off the ballot.
Michigan Capitol Confidential asked Chris Fisher, president of Associated Builders and Contractors (ABC) of Michigan — the group spearheading the drive to repeal the prevailing wage — if he’s concerned about a similar dynamic that might torpedo the effort.
“The unions can’t cut a deal with the constitution,” Fisher said. “According to the constitution, when enough valid signatures are gathered the Legislature has to vote on the measure. Both the House and Senate have made elimination of the prevailing wage law a priority and we are confident that if a vote is taken it will be in favor of the repeal.”
“We don’t think it’s appropriate to mix the prevailing wage issue with other, unrelated issues,” Fisher added. “We shouldn’t be trading one taxpayer rip-off for another taxpayer rip-off.”
MIRS news has reported that union representatives say they’re having a “dialogue” about a potential deal with at least one business group. The MIRS article included general comments attributed to Pat Devlin, head of Michigan Building and Construction Trades Council, to the effect that talks had taken place but no deal had been made.
The business group mentioned is the Business Leaders for Michigan, a private, nonprofit executive leadership organization.
Kelly Chesney, the spokeswoman for the group, says she is not sure whether the union claims of a dialogue are true or not.
“Obviously we are very concerned about the proposal to raise the Corporate Income Tax,” Chesney said. “It would undo much of the progress we’ve made since 2011 and make Michigan less attractive to job providers. We’ve been talking with a lot of different people about it; but as to whether that has included this union; I really just don’t know.”
Devlin didn’t respond to a phone call offering him the opportunity to comment.
So far other business groups have remained silent regarding the alleged dialogue with the unions.
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.