MADISON, Wis. – Another big win for Wisconsin taxpayers comes again at the expense of big labor.
Hours before Republican Gov. Scott Walker delivered his biennial budget address Wednesday, the GOP-controlled Senate advanced Senate Bill 3. The legislation would end the requirement of project labor agreements tied to public works projects.
Senate Majority Leader Scott Fitzgerald called the bill’s passage the latest example of the Senate leading on labor reforms in Wisconsin.
“From the passage of Right to Work to the repeal of the prevailing wage for local governments, we have taken great strides in encouraging open markets and removing government policies that artificially drive up costs,” the Juneau Republican said in a statement.
The bill now moves to the Assembly for consideration.
That’s where the reform legislation was introduced in December by state Rep. Rob Hutton, R-Brookfield.
While critics call the legislation a losing proposition for unions and local control, proponents say it has been taxpayers that have lost under unnecessarily costly project labor agreements. So has the free market, with many non-union contractors opting to stay out of the artificial bidding process.
PLAs are agreements between owners of construction firms and construction unions. Under current state law, firms bidding to work on a public construction project can be required by municipalities and school districts to enter into collective bargaining with the unions, hire workers through union hiring halls, and pay union wages and benefits. This applies to contractors whether they normally use a unionized workforce or not.
Among other things, PLAs may also prescribe wages, set uniform work rules covering overtime and working hours, and supersede all other collective bargaining agreements.
“We’re basically eliminating the ability for a municipality to require that a contractor enter into a project labor agreement for collective bargaining around labor and labor wages,” he said.
Hutton pointed to studies showing that project labor agreements can increase the cost of projects by as much as 18 percent by reducing the number of eligible contractors.
“The vote in the Senate was encouraging and a step in the right direction in creating government neutrality within the construction industry,” the lawmaker told Wisconsin Watchdog on Wednesday. “This law will encourage greater participation in the bid process and provide all construction firms within our state the opportunity to compete for state projects.”
PLA laws have been put to the constitutional test.
In 2011, the U.S. District Court for the Southern District of Iowa upheld a gubernatorial executive order that prohibited the state and local governmental units from entering into a PLA and from requiring the use of a PLA on a project of public works, according to a Wisconsin Legislative Council memo. The court drew on an executive order signed by President George W. Bush which “specified that the federal government could neither require nor prohibit the use of a PLA on a federal or federally funded construction project.”
Bush’s order was superseded in 2009 by President Barack Obama‘s executive order encouraging federal agencies to consider requiring the use of a PLA on a project-by-project basis.
“The order states that it does not require nor preclude the use of a PLA on a project, but that in a large-scale construction project an agency may require the use of a PLA upon consideration of a number of factors, including economy and efficiency in procurement, labor-management stability, compliance with safety and health regulations, equal employment opportunity, labor and employment standards, and consistency with law,” the Legislative Council memo noted.
More recently, the U.S. Court of Appeals for the 6th Circuit upheld a Michigan law that bars governmental units from entering into project labor agreements, but also prohibits governmental units from discriminating against bidders on public works projects based on whether the bidder has entered into a PLA.
A press release from the International Brotherhood of Electrical Workers praised a PLA signed last year by the Milwaukee Bucks for the construction of their new arena.
“Study after study shows that projects built under PLAs are more likely to be completed on time, within budget and with the highest level of quality construction,” the release said.
State Sen. Leah Vukmir, R-Brookfield, co-author of the PLA reform bill, in December said the government should not be in the business of “choosing winners and losers, particularly at the expense of taxpayers.”
“Government-mandated project labor agreements obstruct open, impartial and competitive bidding on construction projects,” she said.
In 2015, Wisconsin became the 25th right-to-work state. The bill was immediately challenged by unions. Last year, the Legislature passed reforms of Wisconsin’s longstanding laws requiring contractors to pay artificially set wages in order to compete for government construction projects.
In other business, the Senate also approved Senate Bill 10, with bipartisan support.
The bill would allow possession of cannabidiol (CBD) oil without a prescription in Wisconsin with a written certification from a Wisconsin-licensed doctor that the CBD oil is for treatment of a medical condition.