Senate rejects proposed changes to construction wage bill

The Republican-controlled Senate defeated several proposed changes Tuesday to a measure that would repeal the state's construction wage law, despite growing concerns over how the bill will affect Indiana's construction industry.

The GOP-led push would eliminate the five-member local boards that set the common construction wage, which contractors must pay workers on a state or local government building project costing more than $350,000.

Sen. John Broden, D-South Bend, proposed an amendment that he said would postpone the "seismic change to Indiana's construction industry" until after lawmakers study the issue this summer.

Broden said his proposal would be a "less-draconian solution than repealing a law that has been on Indiana's books for 80 years." It was defeated 37-12.

Republican legislative leaders supporting the bill say the boards, made up of people appointed by labor unions and an association of non-union contractors, set wages that are artificially high. They say these wages prevent lower, more competitive bid prices from saving taxpayers money on public projects.

A "Note from Mike" posted on Gov. Mike Pence's website Monday said that a "repeal will mean enormous savings for Indiana taxpayers as the costs of public construction projects plummet." The note said Pence plans to sign the bill if it reaches his desk.

In the note, Pence said Ohio saved nearly a half-billion dollars over five years after approving a similar law for public school construction only.

But opposition to the measure is growing. More than 2,000 contractors and union members crowded the Statehouse lawn Monday rallying against the bill.

Local Indiana mayors including Karen Freeman-Wilson of Gary, Ron Meer of Michigan City and Jon Costas of Valparaiso have also joined the fight according to a statement from the Indiana Building Contractors Association.

Critics say it's a myth that repealing the law would greatly reduce project costs and save taxpayer money. They also argue that it would hurt many Indiana-based companies by opening the door for low-paying, out-of-state contractors to underbid.

Democratic Sen. Karen Tallian of Portage proposed what she called "a compromise" to the bill that would have allowed the Indiana Department of Labor to set construction wages, rather than the local boards.

Twenty-three other states use this method to determine common wage levels, she said. That amendment was defeated 36-12.

The chamber did approve an amendment requiring the Indiana Department of Labor to study the effects of repealing the law and in five years report the cost of projects, current wages, and number of Indiana residents working on public works projects to the General Assembly.

The Senate is set to vote on the final proposal Wednesday.