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CPBJ Extra Blog

Transportation and prevailing wage

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Maybe I'm not as astute as I like to think, but something puzzled me this week about the transportation funding reform legislation.

Why did we need three different bills to get this job done?

First there was Senate Bill 1, which passed the Senate in June but really didn't go anywhere in the House of Representatives. Then House Bill 106, which passed on a second vote Tuesday. Then there was S.B. 1060, the $2.3 billion deal the Senate passed Thursday that's identical to H.B. 106.

I asked Erik Arneson, spokesman for Sen. Dominic Pileggi, why it was necessary to have so many bills. Because they wanted to speed up the process. Really?

The legislature has balked on this issue since 2009.

"(S.B.) 1060 was procedurally better positioned to get to the governor's desk this week," Arneson said.

Basically, because of where the other bills were in the process, the legislature could take two votes on S.B. 1060 and avoid additional amendments and debate and hearings on the issue, he said. It passed by a vote of 113-85 in the state House and now moves to the governor's desk for a signature next week.

For other specifics about the bill, check out this PennDOT page.

However, the bill's failure to phase out the Pennsylvania Turnpike Commission's $450 million payments to PennDOT until after 2021-22, means the turnpike's debt and toll rates will continue increasing. Even after that year, the turnpike will still pay $50 million to PennDOT every year after that, according to fiscal notes.

That's a lost opportunity to eliminate a serious debt burden that all Pennsylvanians will be on the hook for in the future.

The compromise that got Republicans to back the transportation bills is interesting, too: raising the minimum threshold on public transportation projects eligible for prevailing wage rates from $25,000 — set in 1961 — to $100,000.

For fun, let's visit the inflationary calculator: $25,000 in 1961 has the same buying power as $195,272.58 in 2013, according to the Bureau of Labor Statistics. So if you look at it that way, the increase is still below an inflationary equivalent.

And there are other things to consider with that provision of this deal: no large state projects, like bridge construction, will fall under that amount, and most large municipal projects will be above it as well.

In the end, government will be buying services less than $100,000 at local market rates. That's not necessarily a bad thing, particularly if you're the best-priced, quality company bidding for that job.

Is it a moot point, as numbers in this Pittsburgh Post-Gazette story could suggest? The threshold for prevailing wage on federal projects is $2,000. So if federal money is used, then the project will still pay a prevailing wage.

Either way, I'll give the legislature an apple for working this thing out and putting us on a reasonably sustainable path, even if it's not perfect.

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