Private Projects Subject to Union Wage

Mon September 22, 2008 - Midwest Edition
Julie Carr Smyth - ASSOCIATED PRESS



COLUMBUS, Ohio (AP) New rules issued Sept. 9 by the Strickland administration will require developers to pay union-scale prevailing wages on millions of dollars of private construction projects where some public money is involved.

The newly interpreted guidelines mean prevailing wages would have to be paid on, for example, a new box retail store built on land decontaminated by the developer using Clean Ohio environmental money. Or during construction of a private factory whose expansion was made possible through a taxpayer-backed equipment purchase.

The rules mark a reversal from what had become common practice in Ohio despite being a violation of state law, said Keith Dailey, a spokesman for Gov. Ted Strickland.

In both of the above cases, companies often didn’t pay prevailing wages during construction after paying them on the cleanup or equipment.

Dailey said the law prohibits separating such projects and applying different standards.

Prevailing wage still will not apply in cases where there is no link between the public and private portions of the project, he said. For instance, if a site is cleaned up separately to attract development, construction started more than six months later would not be subject to the rule.

Critics contend that Strickland, a pro-labor Democrat, has interpreted state law in a way that will benefit union over non-union contractors and discourage private development in Ohio.

“This is really a prevailing wage expansion,” said Shane Ostrowski, a spokesman for Associated Builders and Contractors of Ohio, which represents non-union construction firms. “The governor called it a clarification, but just because he’s said it’s that, doesn’t make it so.”

Ohio Speaker Jon Husted, a Kettering Republican, believes the rules will increase the cost of doing business and drive jobs out of Ohio, said Karen Stivers, his spokeswoman.

Dailey said the administration does not believe the new guidelines will hinder private development nor hurt a Nov. 4 ballot issue renewing the Clean Ohio program. The program is part of the governor’s economic stimulus package.

He noted that all Clean Ohio project applications received before Oct. 15 will not be subject to the new prevailing wage guidelines.

Senate President Bill Harris, an Ashland Republican, discouraged the governor from issuing the new rules, said spokeswoman Maggie Ostrowski.

“He believes this is the absolute wrong time to expand prevailing wage to private development,” she said. “This is counter to all the work we’ve been doing to encourage economic development in Ohio.”

Associated Press Writer Stephen Majors contributed to this report.