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Indiana House backs repeal of state construction wage law

February 24, 2015

The Indiana House on Monday approved a Republican-led push for eliminating the state system that sets wages for public construction projects, although its fate in the state Senate is uncertain.

House members voted 55-41 to support eliminating the boards that set construction wages for each state or local project costing more than $350,000. Thirteen Republicans joined all 28 Democrats who voted in opposing the bill.

Supporters of the repeal say it would save tens of millions of tax dollars each year through an estimated 10 percent to 20 percent price cut on public construction projects by allowing more contractors to pay wages below union scale. Opponents argue the change would hurt many Indiana-based companies by opening the door for low-paying, out-of-state contractors to underbid on projects.

The five-member boards, which include people appointed by labor unions and an association of non-union contractors, set what is known as the common construction wage that any contractor on a building project must pay workers.

Rep. Martin Carbaugh, R-Fort Wayne, told House members the free market should determine the cost of public projects and that repealing the construction wage law would open bidding up to more contractors.

"We have to remember that all this wage that we're paying is taxpayer money," Carbaugh said. "We have to be responsible with people's money."

Numerous construction company officials testified against the proposal last week, saying the law contributes to the state having a stable, well-trained labor force.

Rep. David Niezgodski, D-South Bend, said legislators should remember that business officials led arguments against the repeal, not labor unions.

"You had contractors, you had business people, you had the people who drive the economic engines in Indiana fill this chamber," Niezgodski said. "You had them come one by one and they said, 'Do not do this. This is going to hurt Indiana. This is going to hurt wages.'"

The bill now goes to the Republican-dominated Senate, whose leaders haven't announced their intentions for the legislation.

Senate Labor Committee Chairman Phil Boots, R-Crawfordsville, said he wasn't in favor of taking up the proposal this session and believed a special committee should review the construction wages law after the legislative session.

"I just think it's a bigger issue than we can decide in a two- or three-hour meeting with the pressures that we've got going on here now," Boots said.

The effort comes three years after Republicans pushed through a right-to-work law that drew thousands of union protesters to the Statehouse.

Indiana State AFL-CIO President Brett Voorhies called Monday's House vote an attack on a law that for decades "has created a level playing field for contractors bidding on public projects, ensured skilled, local workers were hired and compensated appropriately and delivered world-class projects on time and on budget."

Rep. Mike Karickhoff of Kokomo, one of the Republicans who voted against the repeal, said he believed lawmakers should entrust local officials to make proper decisions on wages for their construction projects.

"For me, this is an issue of local control," Karickhoff said.

Bill sponsor Rep. Jerry Torr, R-Carmel, said the repeal would allow cash-strapped local governments and school districts to stretch their money further.

"This is going to let the free market work on public works projects bids so the taxpayers get the best deal for their money."

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