MADISON, Wis. – A proposal to eliminate Wisconsin’s dated and byzantine prevailing wage law could become the next Act 10 for the state’s school districts.

In 2011, reforms to the state law governing collective bargaining and health care and pension contributions for government employees engendered a lot of controversy, but ended up saving state and local government billions of dollars. Now, a school board member from southeast Wisconsin says eliminating prevailing wage requirements would help his district – and districts around the state – save millions of dollars.

Wisconsin’s prevailing wage law uses a complex formula to require contractors working on state and local projects to pay specified wages to employees working on the government project. Due to the complexity of the formula, critics say the wages are artificially inflated, leading to higher construction costs for taxpayers.

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Glenn Allgaier is the treasurer of the Elmbrook School District. On Wednesday, Allgaier spoke at a press conference in the state Capitol with lawmakers and business leaders supporting the elimination of Wisconsin’s prevailing wage law.

“[I]t provides us a tool to reduce our budget expenses, especially in the building maintenance area,” Allgaier said.

According Allgaier, taxpayers in the Elmbrook School District would save an estimated $327,267 annually in maintenance costs, and could have saved $510,000 in annual capital debt payments if projects had been built using market wages instead of the prevailing wage.

Key to his computation is a study by the Wisconsin Taxpayers Alliance (WisTAX) that found wages on government projects are typically inflated an average of 45% thanks to the prevailing wage law. The percentage of a project’s cost tied up in labor expenses can vary from 20% to 30%, meaning that if the 45% wage inflation was eliminated, per project savings would be between 9% and 13.5% according to WisTAX.

Authored by Brian Sikma

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