Posted by Phil Lee (216.250.238.181) on June 27, 2001 at 22:18:
Transcription of Letter from William Donald Schaefer, Comptroller of Maryland
William Donald Schaefer
Comptroller
February 17, 2000
The Honorable Thomas L. Bromwell
Chairman, Senate Finance Committee
Presidential Wing
James Senate Office Building
Annapolis, MD 21401-1991
Re: Senate Bill 202
Dear Senator Bromwell:
As you know, under the administration of Maryland's existing "prevailing wage law, "public works (other than school facilities) usually are built at the wage-and-employee-benefits scale of the AFL-CIO Building and Construction Trades' collective bargaining agreements negotiated with unionized general contractors and subcontractors that contain rigid labor costs and restrictive work rules and practices.
The purpose of this letter is to express my opposition to the enactment of Senate Bill 202, which would revoke the long-established exemption under Maryland's prevailing wage law which awards the construction and renovation
of public school facilities on the basis of merit to lowest qualified bidders. This exemption is the identical basis upon which over 80% of all private sector commercial, industrial and institutional construction is performed in Maryland and throughout the United States today. The exemption is fair and beneficial to Maryland's school children, to our educational system, and to our taxpayers who foot the bills (because free and competitive bidding usually results in a reduction in "featherbedded" labor costs and an increase in construction productivity and quality.
For your information, here is a list of 26 states without any prevailing wage law at all or where (like Maryland) the prevailing wage law does not apply to public school Construction: Alabama, Arizona, Colorado, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Mississippi, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio,
Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia and Wyoming.
The Governor apparently has allocated $256 million in his new budget for public school construction and renovation, and I commend him for this. However, a Maryland State Department of Legislative Services study done in 1995 shows that the Maryland state prevailing wage law's administrative application of the union wage-and-benefits scale to state construction
projects (other than school facilities) adds between 5% and 15% to the cost of these projects. There also is information reflecting that prevailing wage laws may add as much as 20% to 30%. Because the amount of tax dollars to be spent on school construction in any given year is defined by budget allocations, if the cost of school construction is arbitrarily increased by
15% or more, the only result can be a reduction in the number of classrooms to be built or rehabilitation work to be performed by that same percentage.
This reduction automatically continues the overcrowding of facilities and a poorer education for our children.
According to the Center for the Study of American Business, moreover, there also is "considerable evidence" that prevailing wage laws (as sustained by the trade unions) serve to reduce employment opportunities for minorities, particularly African-Americans and women. The Governor has pushed continually for more opportunities for African-American and women
minorities.
Under all the circumstances, there is no academic, economic or equitable justification for passage of this bill; and it does damage to the welfare of our children.
In my opinion, the bill should be rejected.
Sincerely,
William Donald Schaefer
WDS/rm