Monday, February 16, 2009

New From Iowa House GOP Leader Kraig Paulsen

Big Labor Strikes

The first big labor bill is on the move, and it’s moving quickly. HSB 149 (click to view) was introduced in the Labor committee this week, and is expected to be moved out of committee on Monday. This bill mandates a “prevailing wage” standard for most public works projects. It’s not the first time this bill has been tossed around, but this time, it has traction in the majority caucus.

The cost to Iowa taxpayers will be quite significant. It’s estimated that at a minimum, Iowa Workforce Development will need an additional $889,000 and 11 new employees and the Board of Regents will need an additional $556,000 and 6 new employees in order to comply with the bill. Additionally, construction costs estimates by the Iowa State Association of Counties and the Iowa Association of School Boards indicate an approximate 10 to 12 percent increase in local project costs due to prevailing wage.

More detail can be found at the following links:

The bottom line is this: HSB 149 places an undue burden on state and local governments and will undoubtedly cause an increase in property taxes or a scaling back of public works projects.

The last state to pass prevailing wage legislation was Minnesota, in 1973. Nine states have since repealed their laws, including Ohio. When Ohio repealed the prevailing wage for school construction, the projects saw a 10 percent reduction in project costs.

This proposal fails multiple tests, but two that immediately come to mind are: 1—This is a tax increase and it will hit property tax payers especially hard. We already have some of the highest property taxes in the nation-House Republicans will not support raising them even more. 2—At a time when

Iowa has such significant infrastructure needs, this is absolutely a step in the wrong direction. We don’t need to add to the multi-billion dollar rebuilding cost effort by addition on an additional 10% increase in project costs-House Republicans will not support these increases.

If you have thoughts on this bill (or any other) now is the time to share them with your legislators. Our phone numbers and addresses can be found here.

You elect us to represent and serve you, please share your thoughts.