News Column

'Prevailing Wage' Battle Shaping up in Calif.

March 18, 2013

Kevin Parrish

prevailing wage

Political battle lines are being drawn over whether to extend California's prevailing-wage regulations to charter cities such as Stockton.

The term "prevailing wage" -- defined as the hourly pay-and-benefits benchmark on public-works projects -- has become code in recent decades for "union wages." California's prevailing-wage laws mean that all construction project bidders are required to use the same rates of pay.

The state's 121 charter cities, and Stockton is one of them, have been exempt.

State Sens. Darrell Steinberg, D-Sacramento, and Anthony Cannella, R-Ceres, want to change that.

They've introduced Senate Bill 7 as legislation to close what Cannella describes as a "loophole that allows certain firms to game the system."

Standing in opposition are the San Joaquin Taxpayers Association, the League of California Cities, the Howard Jarvis Taxpayers Association and more than a dozen cities.

The league, saying its opposition "rests on the fundamental principle of local control," claims the legislation would allow the state to micromanage municipalities.

The city of Stockton has yet to take a position, but Dave Renison, president of the county taxpayers' association, cites the city's bankruptcy in a letter to Steinberg detailing his opposition.

"We have seen first-hand how unfunded liabilities have affected Stockton and (are) opposed to your SB7," he wrote. "It sets a dangerous precedent for interfering in a charter city's right to maintain control over its municipal affairs and it is in direct conflict with recent California Supreme Court decisions."

The Steinberg-Cannella legislation, which last week cleared the state Senate Committee on Labor and Industrial Relations, would make charter cities eligible for state funds only if they complied with the state's prevailing-wage laws.

The bill's next stop: the state Senate Appropriations Committee.

Renison said, "The bill punishes charter cities that exempt themselves from prevailing wage."

His final argument? "Statewide concern should be for municipalities to save as much money as they can on construction projects in order that they might ease their massive unfunded pension liabilities and prevent themselves from entering into bankruptcy."

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: (c)2013 The Record (Stockton, Calif.) Distributed by MCT Information Services

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters