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Prevailing wage bill grinds budget negotiations to halt

Delaware Public Media

Republicans are demanding Democrats weaken the state’s prevailing wage laws before they consider any new tax hikes as they work toward closing a projected $382 million budget gap.

A bill circulating for co-sponsors would exempt any county or municipal government from paying prevailing wage on capital projects.

That would expire after three years and state officials would study how much money was saved through the process.

Prevailing wage is set through salary surveys filled out by different professions – mostly involved in the construction trades – and divided by each county.

For example, a roofer in Sussex County makes about $17 an hour on the lowest end of the spectrum, while a piledriver in New Castle County tops out at more than $75 an hour.

Backed by GOP leaders, the measure is creating a standoff in ongoing negotiations between both parties that still have to come up with about $200 million to balance the budget.

“The indication to me was that it wasn’t too well received because two copies were left on the table and there were only 12 people in the room so I felt that probably had a real significance to it,” said House Minority Leader Danny Short (R-Seaford).

Not only did those in the room, like House Speaker Pete Schwartzkopf (D-Rehoboth Beach), consider it a nonstarter, so does Gov. John Carney (D).

His spokesman, Jonathan Starkey said Carney wouldn’t consider changes to prevailing wage as part of a deal to raise the personal income tax – something that’s been languishing during these meetings for weeks.

Instead, Starkey says negotiations need to focus on a mix of new revenue and long-term spending restraint.

Senate Minority Whip Greg Lavelle (R-Sharpley) appeared frustrated when he learned of that fact Thursday afternoon.

“The governor never comes to any of our meetings, doesn’t bring anything up, his cabinet secretaries sit there and say nothing and then this is how we get the message? Fine. Message received and message delivered,” Lavelle said.

While prevailing wage is paid through Delaware’s capital budget, he and other Republicans have argued for years it’ll still save operating dollars.

That’s because budget writers typically hand over millions of dollars in operating funds to the bond bill to help bankroll more infrastructure projects.

Lavelle and his caucus intend to act like a metal rod jammed into a set of gears to block any of the governor’s tax proposals, and can since Democrats lost their supermajority in the Senate three years ago.

“If [Carney] is unwilling to consider this structural change to the budget process and to save the citizens of Delaware tax dollars and he’s ‘no way’ then I’m ‘hell no’ to his proposals.

At issue is a deeply held Democratic Party belief – underscored by union support – that the state should pay good wages when they build a new school or road.

Rep. Michael Mulrooney (D-Newark), a union electrician himself, says prevailing wage came about as a way to keep people out of poverty.

“If there’s work in the area and the state has such a big purchasing power, their job should be to protect the workers in their state and in their communities,” Mulrooney said.

Altering it evolved into a third-rail issue that Democrats reflexively dismiss as often as Republicans suggest it.

“Why do you want to balance the budget on the backs of the worker? Why do you want to punish guys who fight for a decent hourly wage, who fight for a benefits package that includes a pension, healthcare, healthcare for their retirees? It just befuddles me why the want to do that.”

If a deal isn’t reached, it seems like lawmakers will have to cut their way to a balanced budget.

The Joint Finance Committee tried to keep making controversial cuts last week, but were shut down by Schwartzkopf and Senate Pro Tem David McBride (D-New Castle).

They wanted to reach a deal on the personal income tax before pruning the budget, but talks have instead tailspinned into a standstill.

Schwartzkopf says he just doesn’t see how he could deliver Democrats to vote for changing prevailing wage.

“I count votes in the building and I just know that anything with prevailing wage doesn’t have the votes,” he said.

But it’s happened before.

Two years ago, lawmakers unanimously raised the dollar threshold that require contractors to pay prevailing wage, as well as exempted projects funded by certain pots of money.

If they can’t come to a similar kind of an agreement this year, it’ll require JFC to dig closer to the bone as they make highly unpopular cuts.

Should it come to that, Schwartzkopf isn’t sure he could hold his caucus together.  

“I’m not even going to try to hold them together because chances are I might be one of the ones that won’t vote for the budget at that time,” he said.

“I mean, it’s just ridiculous to sit there and think we’re going to cut our way out of this mess.”

Legislative leaders will meet again next week, but it’s unclear how they’ll overcome such an impasse.

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