Is State's Prevailing Wage Law at Risk of Being Tossed?
A citizen initiative would trump Gov. Snyder's promised veto on any repeal legislation
The deck could soon be stacked in favor of repealing Michigan’s prevailing wage law. On Tuesday, the Board of State Canvassers approved language for a citizen initiative to repeal the law, which the Anderson Economic Group notes costs taxpayers more than $224 million annually extra for schools and more for local governments and roads.
Gov. Rick Snyder reportedly pledged not to sign a prevailing wage repeal as part of the bargain he made to garner enough legislative votes to put the now-defunct Proposal 1 on the May ballot. A citizen initiative to repeal the prevailing wage would take the governor out of the equation. If a sufficient number (252,523) of valid signatures were collected within 180 days and both the House and Senate then passed a repeal within 40 days, it would go into effect automatically.
“We’re very serious about this,” said Chris Fisher, president of the Associated Builders and Contractors of Michigan and a member of Protecting Michigan Taxpayers, the coalition sponsoring the initiative. “The Board of Canvassers’ action means we can start collecting signatures. We plan to start collecting them within the next two weeks.”
Protecting Michigan Taxpayers is the same group that led the successful campaign to defeat Proposal 2 in 2012, which would have enshrined a union collective bargaining mandate in the state constitution.
Fisher was asked how confident initiative sponsors are of having enough votes in the Republican-controlled Legislature to repeal prevailing wage, assuming sufficient signatures can be collected.
“We’re very confident,” Fisher said. “Both the Senate and House Republican caucuses have made repealing the prevailing wage a top priority. We wouldn’t be doing this if we weren’t confident.”
Fisher also said that even though the citizens initiative is under way, it does not preclude the Legislature and governor from reaching an agreement to enact a repeal, making the initiative moot.
“There is no reason why the Legislature and the governor couldn’t work together concurrently to do the repeal while the initiative goes forward,” Fisher said.
Snyder reportedly pledged not to sign a repeal of the prevailing wage, but so far as is known he did not pledge to veto such a measure. The governor and Legislature could potentially strike a bargain (for instance, as part of a road funding deal) under which the Legislature passed the prevailing wage repeal and the governor allowed it to take effect without his signature. (Under Michigan law a governor does not have to sign a bill for it to become law.)
On May 14 the Senate passed a three-bill package, Senate Bills 1, 2, and 3, to repeal the prevailing wage and sent it over to the House. However, unless the Legislature and Snyder have agreed in advance on getting the legislation enacted, the governor could still veto it. That’s why Protecting Michigan Taxpayers is moving ahead with the citizen initiative to create the "insurance policy" of an alternative pathway to a repeal of the prevailing wage.
“Prevailing wage policies raise the price of government construction,” said James Hohman, the assistant director of fiscal policy at the Mackinac Center. “It’s a bad deal for citizens and any way they get this repealed will pay off for residents.”
Michigan’s prevailing wage law forces government and publicly funded entities to pay a set minimum wage for workers based on union contracts when contracting for construction work. It was signed into law by former Gov. George Romney in 1965.
Fisher was asked if there has been any organized opposition to the citizen initiative so far.
“No,” Fisher responded.
Typically, with any signature-gathering effort the goal is to collect many more signatures than the required number, as a protection against possible challenges.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
What You Need to Know About the Initiative to Repeal Prevailing Wage
If sponsors gather enough signatures in time, then legislature votes
As part of the negotiations to get Proposal 1 on the May 5 ballot, Gov. Rick Snyder reportedly promised to veto a potential repeal of the state's “prevailing wage” law. This law prohibits awarding government construction contracts to the lowest bidder, unless the contractor pays the equivalent of union wages that often exceed market rates. Studies have shown that this adds hundreds of millions of dollars annually to the cost of government infrastructure projects, including school construction and road repairs.
Snyder has not denied those reports, and even though voters turned down the proposed sales tax hike in May, there are still concerns that he may feel bound by the alleged deal and veto a prevailing wage repeal bill that has already passed the Senate.
That’s the back-story behind an announcement that the Bureau of Elections has approved petition language submitted by a coalition, calling itself “Protecting Michigan Taxpayers,” which wants to repeal the prevailing wage law through a process called “initiated legislation.” As prescribed by the state constitution, this allows a new law to be enacted (or an old one repealed) by a vote of the people and the Legislature, and “over the head” of a governor.
Here’s how it works:
Michigan’s constitution provides three ways for citizens to change the law, or “take the initiative.” The first is an initiative to amend the constitution itself, which requires gathering signatures from registered voters equivalent to 10 percent of the total votes cast in the last election for governor. Doing so places the proposal on the next general election ballot for an up-or-down vote by the people.
The second is a referendum on a law passed by the Legislature. By gathering signatures equal to 5 percent of the votes cast for governor, a group of citizens place a new law “on hold” until voters decide on it in the next general election. Lawmakers have, though, exploited a loophole that bans referendums on appropriation bills — they simply add a modest appropriation to controversial new laws, making them "referendum proof." But that’s another story.
The third method is the one being used in the effort to repeal Michigan's prevailing wage law. It requires sponsors to gather signatures in favor of a proposed statute equal to 8 percent of the votes cast in the last governor election. (According to Ballotpedia that currently means 252,523 signatures.) Sponsors have a 180-day window to collect signatures.
If sponsors gather this number, the measure is placed before the Legislature for an up-or-down vote within 40 days, with no amendments allowed and — critical in this instance — no approval from the governor required.
If a simple majority of those elected and serving in both the House and Senate vote in favor, the measure becomes law with no further action required. The new law can only be amended by future legislatures with a supermajority vote of three-quarters in both the House and Senate.
If the Legislature does not approve the initiated legislation, then it is put to voters in the next general election. The Legislature can also place a competing alternative on the ballot, and the one that gets the most votes over 50 percent becomes law.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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