Prevailing wage change dispute could send budget talks into July
Republican lawmakers say they’re willing to blow past Delaware’s budget deadline this Friday if they can’t get a moratorium on prevailing wage for local governments and school districts over the next three years.
The proposal would pay for public operations at the same levels as the current year through July.
A bill is still being drafted and it’s unclear what its final form will look like.
Democrats say prevailing wage changes are a deal breaker, but Republicans walked away from the table Tuesday, saying it’s their last demand on top of studying ways to save money on healthcare and tying spending to inflation.
“It’s like nailing Jell-O to the wall. It changes every time,” said House Speaker Pete Schwartzkopf (D-Rehoboth Beach) of the backroom talks.
He says he couldn’t get five members of his caucus to vote for such a prevailing wage moratorium. Instead, Schwartzkopf countered that he’d be willing to tweak the program in a way that could lower the cost of these public works projects.
He notes the state could make it mandatory for contractors to fill out state wage surveys that set an average, wage for laborers across all three counties.
Republicans say such wages are artificially inflated because union shops drown out smaller businesses across the spectrum, though Democrats say the wages would go down if all the surveys were returned.
Schwartzkopf and other Democratic leaders also chopped up a proposed personal income tax hike, allowing residents to itemize 50 percent of their deductions to try and appease the GOP.
Their original plan called for cutting such deductions entirely.
It would raise about $171 million when fully implemented next summer – roughly $40 million less than the first proposal.
Republicans seemed on board at the beginning of the day, according to Schwartzkopf, but it seemed to have waned over the next few hours.
“We’re trying to make those structural changes that we hear the governor and the other side want by putting teeth into some sort of agreement,” said Senate Minority Whip Greg Lavelle (R-Sharpley).
The teeth he’s referring to is some type of expiration date on a proposed personal income tax hike that’s logjammed budget talks for the past month, as well as mandates that any recommendations a state panel might come up with to save money won't sit on a shelf.
Sen. Colin Bonini (R-Dover South), who’s sponsoring the bill, says it’s just another option available that he doesn’t want to continue into perpetuity.
“Do we want to do this in month six, seven, eight, nine, ten? No, I certainly don’t, but I think giving us more time on discussions we’ve already started, I think, is more than prudent,” Bonini said.
"The Republican proposal to put off the difficult decisions we need to make is not the right move," said Jonathan Starkey, Gov. John Carney's (D) spokesman.
Senate Pro Tem David McBride (D-New Castle) said he’s “disappointed” with the Republicans’ decision to “pre-empt” ongoing negotiations. Instead, McBride says he wants to finalize a deal before the end of June.
State lawmakers are staring down a roughly $350 million budget shortfall to overcome.
Carney has yet to sign a bill passed earlier this month that raises the corporate franchise tax, collecting about $116 million.
The Joint Finance Committee was supposed to meet Tuesday morning to work on the budget, but eventually cancelled.
That work will continue Wednesday.