Friday
March 9, 2007
House Approves Labor Earmark
at the Expense of Clean Water
Source: US House of Representatives Transportation and Infrastructure Committee
The House approved H.R. 720, the Water Quality Financing Act of 2007, a bill to capitalize EPA's Clean Water State Revolving Fund (SRF) to provide low interest loans to communities for wastewater infrastructure projects. However, the bill includes an expansion of the Davis-Bacon Act, which will impose prevailing wage requirements on wastewater infrastructure projects, needlessly making them more expensive and resulting in fewer clean water projects being built for the nation's communities.
"This is the mother of all unfunded mandates," said U.S. Rep. John L. Mica (R-FL), Republican leader on the Transportation and Infrastructure Committee. "This unprecedented expansion of prevailing wage law is an earmark for labor union bosses that will cost taxpayers hundreds of millions of dollars.
"The inclusion of this provision will impose untold costs on state and local governments, hitting states across the nation without prevailing wage laws particularly hard."
Eighteen states currently have no prevailing wage laws, but H.R. 720 would impose Davis-Bacon wage requirements upon them. The 18 states which will especially suffer from the impacts of the Davis-Bacon expansion are Alabama, Arizona, Colorado, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, and Virginia.
"Instead of helping communities complete more of their badly needed wastewater projects, this provision will have the opposite effect by artificially inflating project costs and reducing the number of projects we'll be able to fund," Mica said.
"I recognize the importance of the benefits offered by this bill, but I'm disappointed by the inclusion of the largest expansion of Davis-Bacon Act wage-padding in U.S. history," said U.S. Rep. Richard Baker (R-LA), Water Resources and Environment Subcommittee Ranking Republican. "This is a hidden tax imposed on rate payers and tax payers that increases capital costs all for questionable benefit.
"With this bill, we are sacrificing clean water in order to promote a labor union agenda. This bill will make clean water projects cost more, and it will especially hurt small disadvantaged communities who are trying to clean up their local waters," Baker added.
Prior to the expiration of the Clean Water SRF authorization in 1995, only the initial Federal seed money for infrastructure projects was subject to prevailing wage requirements. Under H.R. 720, Davis-Bacon requirements would be expanded to non-Federal funds as well, including state matching funds, communities' loan repayments, and interest.
The Government Accountability Office (GAO) advocated an outright repeal of the Davis-Bacon Act as long ago as 1979. GAO noted that economic conditions and labor provisions had changed significantly since 1931, when Davis-Bacon was first passed.
The application of the Davis-Bacon Act has been estimated to add 5% to 39% to the total cost of project construction. According to those estimates, repealing the Act would save the federal taxpayer over $1 billion on construction costs and $100 million in administrative costs annually.
Contact:Justin Harclerode (202) 226-8767