Prevailing Wage
The repeal of prevailing wage in this state has been debated for quite some time, and during this legislative session it has seen some movement. With a Republican controlled Senate and House, both chambers view repealing prevailing wage as a top priority. In fact, Senate Majority Leader Arlan Meekhof has stated on multiple occasions that it has been his number one priority since being elected to state office. That fact was demonstrated when he introduced Senate Bills 1, 2 and 3.
Just one week after the Proposal 1 election, the Senate Committee on Michigan Competitiveness took testimony on the legislation and voted out the three bills to repeal prevailing wage. MITA gave compelling testimony in opposition to the repeal of prevailing wage and received a lot of positive feedback from lawmakers and supporters regarding our comments. That same week, the full Senate quickly passed the package of bills along party lines, with some Republicans voting no but the majority in support, sending the package over to the House.
Before the House Committee on Commerce and Trade could debate prevailing wage in an open forum, it was announced that supporters of the prevailing wage repeal would begin collecting signatures for citizen-initiated legislation, based on the constant message from Governor Snyder that he would likely veto any legislatively passed initiative. The Board of Canvassers has approved the language, and supporters now have 180 days to collect approximately 250,000 signatures. Upon certification, the Legislature would then have 40 days to act on the bill or let it go to the ballot.
In response to the citizen-initiated legislation drive, Speaker Kevin Cotter has announced that the House will not take the measure up until the new legislation is before them or the clock runs out on the signature collection process, which is highly unlikely.
MITA has participated in a coalition of labor and management for several years and will continue to monitor this new development, as well as keep our members informed.
Road Funding
Speaker of the House Kevin Cotter recently introduced a plan to secure $1.05 billion in additional annual funding for our transportation needs. The plan relies heavily on existing state spending and redistributing revenues. Over $700 million of the total proposal comes from redistributing current general fund dollars. There is very little new revenue included in the House proposed plan, however, it does statutorily dedicate over $1 billion towards transportation and has an inflationary increase component to the existing gas tax.
The House Committee on Roads and Economic Development passed the Speaker’s plan with some minor changes on Wednesday of this week. It is anticipated that the full House will take up the measure and send it over to the Senate. MITA has worked very hard to convince the Legislature to add additional new revenue to the plan and to not rely on existing funds that, at times, can be uncertain. It is being reported that the Senate is considering a plan for new revenues that could take the form of a gas tax increase. The most rumored proposal is a 5 cent increase each year for the next three years for a total of 15 cents after full implementation. This would generate approximately $750 million in new constitutionally dedicated revenues for transportation. The Senate can then pass some of the House proposal to get us to at least a $1.2 billion road funding proposal.
There are a variety of reform items that are being discussed. This includes extending warranties on the local level and opening up some items on the local level to competitive bidding, which were previously only awarded to the local unit of government for construction. MITA staff has worked tirelessly to ensure that those proposals are not erroneous and detrimental to the heavy construction industry.
The significant public discussion that has taken place because of Proposal 1 has created some positive movement within the Legislature to come to a final road funding agreement. Both chambers and the Governor have committed to finding a solution before the Legislature breaks for the summer, and if one isn’t finalized before the end of June, then they will continue to work through the summer.
$400 Million More This Fiscal Year
Because there is so much public pressure on the need to increase road funding, primarily due to the efforts of MITA and its members, the Legislature has approved additional funding in the current year’s budget. As revenues were higher than originally anticipated, the Legislature and Administration has agreed to put in an additional $400 million for roads and bridges in Michigan.
Lawmakers thought that $400 million in additional revenues to transportation was appropriate because that was the amount that would have been distributed to the program if Proposal 1 would have passed.
For any questions or concerns, please feel free to contact Mike Nystrom, Executive Vice President, at mikenystrom@mi-ita.com or Lance Binoniemi, Vice President of Government Affairs, at lancebinoniemi@mi-ita.com.
