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Indiana Senate Narrowly Backs Repeal of Construction Wage Law

Critics say a repeal would only ease the way for low-paying, out-of-state contractors to underbid.

Sat April 18, 2015 - Midwest Edition
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INDIANAPOLIS (AP)- A Republican-led push to repeal the state law that sets wages for public construction projects narrowly passed through the Senate on Wednesday, despite concerns from both sides of the aisle about how the bill will affect Indiana’s middle class and construction industry.

Senators voted 27-22 to support eliminating the boards that set wages for state or local projects costing more than $350,000.

Gov. Mike Pence and other repeal supporters say the local boards, made up of people appointed by labor unions and an association of non-union contractors, set wages for tax-funded projects that are artificially high.

"I’m a strong believer in protecting taxpayers and that’s what this bill does," said bill sponsor Sen. Carlin Yoder, R-Middlebury. "We owe it to them and to ourselves to ensure that all of those projects are done with integrity and with sound financial knowledge."

Pence’s website says repealing the law would open the door for more competitive bid prices, saving as much as 20 percent from the cost of building projects.

But critics say those numbers are inaccurate, and a repeal would only ease the way for low-paying, out-of-state contractors to underbid.

Democratic Sen. Karen Tallian of Portage, who’s been a major opponent of the measure, called it "a dangerous proposition" that would lower the wages of the middle class and hurt Indiana-based businesses.

”How do we expect to attract a great workforce when by actions like this we’re going to cut their wages?’ she said.

Thousands of contractors and union members rallied against the measure Monday at the Statehouse. Several Indiana mayors, including Karen Freeman-Wilson of Gary and Ron Meer of Michigan City, have joined the fight, the Indiana Building Contractors Association said in a statement.

Even 12 Republicans voted against the measure, including Sen. Michael Young of Indianapolis, who consistently opposed amendments proposed Tuesday that would have maintained the common construction wage.

”I’m a free market person,’ Young said. ”But I really don’t think we’re going to see any savings.’

Sen. Phil Boots, R-Crawfordsville, has consistently said he wasn’t in favor of taking up the proposal this session and believed a special committee should review the construction wages law.

”I just think there’s a lot of information that’s not available to us at this point and I know a lot of people are making decisions based more on pressure than it is on reality,’ Boots said to the Senate chamber.

As chairman of the Senate Labor Committee, many believed Boots would have control over the bill’s progress this session. But Republican Senate President Pro Tem David Long, who supports the measure, assigned it to the Tax and Fiscal Policy committee, where it advanced with an 8-5 vote.

The measure would establish a mandatory E-Verify program to ensure that all workers are U.S. citizens and prohibit businesses from paying workers in cash. It would also require contractors to be qualified by the state Department of Administration or the state Department of Transportation and have an employee training program.

Contractors who violate these rules would face punishments such as criminal charges or temporary suspension from bidding on future government projects.

The House earlier passed a similar bill, and a final agreement must still be reached before the proposal can be sent to Pence for his approval.

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