The arrest and indictment of Ohio House Speaker Larry Householder on federal racketeering charges has made national headlines and shaken up Ohio’s political leadership. Unfortunately, bad decisions are nothing new in Columbus, as illustrated by the recent passage of Senate Bill 4 (SB 4).
Recently enacted with bipartisan support and signed into law by Gov. DeWine, SB 4 allocates funding for construction and conservation projects, including money for new schools. But that’s not all it does. House Republican leaders, through an opaque process, amended the bill to include an expansion of the state’s prevailing wage law, which will increase the taxpayer cost of many construction projects, reducing the number of projects that can be undertaken in the first place.
Prevailing wage laws require government funded construction jobs to pay workers inflated, typically union-dictated wages. These laws benefit unions by killing competition, but burden taxpayers with added costs, which is why many neighboring states, including West Virginia, Michigan, and Wisconsin, have repealed them in recent years. Alas, Ohio legislative leaders put special interests ahead of state interests and expanded, rather than repealed, prevailing wage in Ohio.
In 1997, Republican lawmakers exempted Transportation Improvement Districts (TDIs) from prevailing/inflated wage laws as a way to save taxpayer money and promote economic development. Far from being a loophole, as some defenders of prevailing wage suggest, this exemption was well-crafted and merited. SB 4 expands prevailing wage by ending the exemption for TDIs, which include more than half the counties in Ohio.
The expansion of prevailing wage is bad policy that will cost Ohio taxpayers dearly, also concerning is the process in which prevailing wage expansion was passed. As already mentioned, SB 4 allocates funding for capital improvement projects; it has nothing to do with prevailing wage laws and the amendment may even be illegal under the single subject rule of the Ohio Constitution. A similar attempt to expand prevailing wage was voted down less than two months ago, when Democrats in the Senate attempted to amend a land conveyance bill to include the exact same prevailing wage expansion. That time, Senate Republicans voted it down.
At a time when the pandemic is putting a massive hole in Ohio’s budget, it makes no sense to expand prevailing wage mandates that needlessly and significantly increase costs for taxpayers. The bad news is that this move will harm Ohio taxpayers. The good news is that Ohio is an outlier here and most states are getting rid of their prevailing wage mandates.