Governor Bruce Rauner’s plans to tackle the state’s budget crisis have been transparent and consistent since taking office this past January. He has vowed to turn Illinois around with rational reforms that aim to grow our economy and set the course for a more sustainable and promising future for all Illinoisans.
He was elected to make tough decisions that past and current leadership in Springfield have failed to make. These decisions will break the status quo and the costly practices that have been unfair to hardworking middle-class families for over a decade.
To say that Governor Rauner is holding his reforms as “ransom” is disingenuous to Illinois taxpayers. He has been in office for nine months and has been tasked to fix over a decade of mismanaged finances, all while being waylaid by House Speaker Mike Madigan and Senate President John Cullerton. Both of whom have been elected politicians in Springfield for a combined 80 years.
This means a lot of change has been thrown at different areas in respect to reforming Illinois. People who are familiar with a particular process may have trouble adjusting and understanding the long-term goals of the governor’s reforms.
In response to “Prevailing wage a good deal for workers and taxpayers,” as seen in the Rockford Register Star on September 6, 2015, Illinois sets minimum “prevailing wages” for workers on state and local construction projects. These prevailing wages are significantly more than minimum wages. Over the years, prevailing wages have generally been set to match the union scale, even though a majority of construction workers in Illinois are not part of a union.
In addition, Illinois law permits, but does not require, the use of Project Labor Agreements (PLAs) for construction projects. A PLA is negotiated by the state and unions before the project is awarded to a private contractor.
The private contractor is then forced to comply with the terms negotiated by the state and the unions, which increases cost. While not mandatory, the state has been increasingly prone to attach union-only PLAs to construction projects.
Estimates show that mandatory PLAs can drive up the cost of a project by roughly at least 18 percent, with prevailing wage requirements having a similar effect. The requirement to pay prevailing wage is a concern to many municipalities. The City of Elgin in 2012 requested estimates on an environmental public works project (that was eventually delayed) and expressly sought estimates for the cost with and without prevailing wage rates. The estimate with the prevailing wage rate ($910,000) came back $510,000 higher than the estimate without the prevailing wage rate ($400,000); that means the community would have been obligated to pay 227% more to meet prevailing wage rates.
Governor Rauner’s proposed reform would allow Home-Rule local governments the ability to determine local prevailing wages, a local prevailing wage would not apply to a state-funded project (but a federal prevailing wage would continue to apply, if the project is federally funded). The reform would also prohibit the use of PLAs for state-funded projects, except when required by federal law.