Posts Tagged ‘prevailing wage’

Prevailing Wage, Taxes Focus Of State Senate 18 Debate

By Sean Whaley | 8:27 pm September 25th, 2012

CARSON CITY – Democratic state Senate candidate Kelli Ross said today that she is the “union” candidate in the District 18 race in Las Vegas, while Republican Scott Hammond said he will listen to but not vote in lockstep with labor in the Legislature.

The two candidates in the newly created Senate seat in northwest Las Vegas debated on Jon Ralston’s Face to Face television program. The Senate contest is one of five viewed by both parties as critical to controlling the 21-member house in the 2013 legislative session.

Democrats now have an 11-10 edge in the Senate.

Kelli Ross.

During the debate, Hammond, currently a member of the Assembly, said he would seek to reform Nevada’s prevailing wage law so that public construction projects could be built more cost effectively and generate more jobs. Paying less would stretch public construction dollars further, he said.

He pointed to the Phoenix, Ariz., area, where prevailing wage rates are $14 an hour compared to $42 an hour in Nevada.

“I think we need to reform that, look at putting it back on to something that is the standard market, and I think we’re going to see significant savings there,” Hammond said.

Ross said she would oppose any move to reduce the prevailing wage, a wage set for construction workers hired for state and local government projects. The prevailing wage guarantees a qualified workforce, she said.

“Not only would it not save money it would even hurt the middle class that much more,” Ross said. “When you’re paying a prevailing wage you’re guaranteeing that you’re going to get a job done, get a job done on time and get the job done right.”

State law requires the state Labor Commissioner to survey contractors who have performed construction work during the past year in order to determine the prevailing wage rates. Prevailing wage rates are required to be paid on all Nevada public works construction projects such as schools, libraries, roads and government buildings costing more than $100,000.

Scott Hammond.

Ross acknowledged that most of her endorsements are labor groups, and she said there is not a labor position she is aware of that she would oppose in the Legislature.

“Yeah, I am the union candidate,” she said. “But I’m also the candidate that is there for the people. I am born and raised in Nevada. These people know that I’m going to do what is right for them, and what is going to bring our middle class up to the standards that it should be.”

Hammond said he will listen and try to respond to union concerns.

“But I’m not going to be beholden to the union organizations,” he said.

The debate also delved into the issue of taxes, and Hammond’s support for extending a package of sunsetting taxes supported by GOP Gov. Brian Sandoval in the 2011 session. Hammond said he has not yet decided whether to support extending the sunsets in the next two-year budget as proposed by Sandoval to avoid further cuts to education.

Hammond said the tax extension in 2011 also resulted in the complete elimination of the state business tax for small Nevada employers.

“The reason why I haven’t made up my mind is because I still want to see what the Economic Forum is going to tell us in the next couple of months,” he said.

The forum estimates the tax revenues that will be collected by the state for the next two-year budget.

Ross said she supports the tax extension, but called it just another Band-Aid that does not solve the state’s long term revenue issues.

In a discussion of education concerns, Ross said the current public funding formula shortchanges Clark County at the expense of rural and Northern Nevada. It needs to be changed so Clark County taxpayer money stays in the south, she said.

An interim legislative committee recently endorsed revisions to the public education funding formula to compensate for such issues as poverty and non-English speaking students, factors found more often in Clark County than elsewhere in the state.

Hammond said the formula can be reviewed, but giving parents more choice in where their children attend school, including expanding charter schools, will improve student achievement.

Senate District 18 has a Republican advantage, with 39.9 percent of the voters registered GOP compared to 37.6 percent for Democrats as of the end of August.


Audio clips:

Senate 18 candidate Scott Hammond says Nevada’s prevailing wage law needs to be reformed:

092512Hammond1 :10 significant savings there.”

Senate 18 candidate Kelli Ross says the state’s prevailing wage law helps the middle class:

092512Ross1 :10 job done right.”

Ross says she is the union candidate but also the candidate of the people:

092512Ross2 :13 it should be.”

Hammond said he will listen to but not automatically support labor concerns:

092512Hammond2 :16 the union organizations.”



Nevada Small Business Owners Say Minimum Wage, Construction Defect Laws Hampering Job Growth

By Sean Whaley | 2:27 pm February 14th, 2012

CARSON CITY – Members of the Nevada chapter of a small business organization say the state’s minimum wage and construction defects laws are hampering job growth in the state.

The state’s prevailing wage law was also cited as a drag on economic development in the survey of its members by the Nevada chapter of the National Federation of Independent Business.

Randi Thompson, Nevada state director of NFIB, said about 50 of the 1,800 members statewide responded to the survey, which was conducted in December and delivered to Steve Hill, executive director of the Governor’s Office of Economic Development.

Hill had asked what laws and regulations needed to be changed to spur job growth in Nevada.

“We were delighted at the invitation and jumped at the chance to contribute our members’ ideas on how to get our state’s economy moving again,” Thompson said. “When coupled with the results from our regular annual balloting of NFIB members, the results of which will be out soon, we believe the state will have a much firmer grasp on where it needs to go once it has the opinions of the Nevada’s leading job-generators.”

Thompson said Gov. Brian Sandoval has made it clear that he wants to make the state an even more business friendly state with his call earlier this month to eliminate or revamp more than 1,700 state regulations following a one-year review.

“Small businesses account for nearly two thirds of all new hires on average, making them a critical component to lead Nevada out of this recession,” she said.

Sandoval said today he believes all three issues will come up for discussion in the 2013 legislative session based on what he has heard from some lawmakers.

Sandoval said he supported changes to the construction defect legislation in 2011 and will do so again next year.

“Particularly with regard to mandatory attorneys’ fees in those cases,” he said. “I’d like to see some reform with regard to that. I’ve had several conversations with the contractors on that issue.”

Thompson said repealing Nevada’s minimum wage law will not be a top priority in 2013 just because of the time it takes to change the state constitution.

“I think the one we can take a bite-sized chunk out of is the construction defects,” she said. “My folks pretty much just want to revoke it. They want to pull out the whole chapter. They don’t want to sit down and negotiate it. It is so driven towards lawyers and not toward protecting consumers that that law needs dramatic change.”

Changes to the prevailing wage law would give taxpayers more public construction projects for their money, Thompson said.

“You still will make a good living wage, but prevailing wage is not a market-based wage,” she said. “And the way we do prevailing wage in this state is probably something else that our Labor Commissioner needs to look at.”

Respondents to the NFIB survey said they wanted to entirely revoke the construction defects law contained in Nevada Revised Statutes Chapter 40, which Thompson said opens the door to class action lawsuits against any contractor or subcontractor involved in building homes, apartments, or condominiums – regardless of responsibility for the defect.

Ray Pezonella, owner of Pezonella Associates, an engineering firm in Reno, said that construction-defects legal fees costs him anywhere from $50,000 to $100,000 each year, whether his work was connected to the defect or not. Because that amount is below his insurance deductible, he has to pay for it directly.

Reno businessman Ray Pezonella. / Nevada News Bureau file photo.

“The lawyers just sit down and tell you it will cost you ‘X’ to settle the suit, or we’ll go to court,” Pezonella said. “Even if we did nothing wrong on the job, we write them a check. Where is the justice in that?”

The concern with the minimum wage provision in the state constitution is that it has the effect of setting the Nevada rate at $1 over the federal minimum wage rate.

Thompson said there is interest in the small business community for removing such “tax and wage” issues from the state’s constitution, or in the alternative, seeking an exemption for tipped employees.

Tax policy should not be set in the constitution, she said.

Voters put the minimum wage rate in the state constitution, however, and repealing it would require the state Legislature to approve a change in two sessions, which would then have to be approved by voters.

State Sen. Joe Hardy, R-Boulder City, introduced legislation in the 2011 session to begin the process of removing the minimum wage requirement from the state constitution, but the measure did not survive.

Voters overwhelmingly approved the minimum wage proposal, which continues to be strongly defended by the Nevada state AFL-CIO, which qualified the measure for the ballot.

Thompson said the third issue, which is the practice of paying prevailing wage on government funded construction projects such as schools and roads, is a concern because it adds to the costs that must be paid by taxpayers.

Some states have implemented changes to their prevailing wage laws, and some Nevada lawmakers are considering changes as well, she said.


Audio clips:

Gov. Brian Sandoval says all three issues are expected to be debated in the 2013 legislative session:

021412Sandoval1 :08 debated in 2013.”

Sandoval says he supports changes to the construction defect law:

021412Sandoval2 :23 on that issue.”

Randi Thompson, Nevada state director of NFIB, says changes to the construction defect law are possible in 2013:

021412Thompson1 :21 needs dramatic change.”

Thompson says reforming the prevailing wage law would save taxpayer money:

021412Thompson2 :15 to look at.”


Coalition Calls For Tax Hike To Fund Public Construction Projects To Create Jobs

By Sean Whaley | 5:46 pm January 20th, 2011

CARSON CITY – A coalition of construction industry groups today advocated for a tax increase to fund public works projects around the state to help put people back to work.

The Building Jobs Coalition presented its proposal, called the “Creating 100,000 Jobs” report, in press conferences in both Las Vegas and Reno.

The proposal will likely face significant challenges, however, with Gov. Brian Sandoval’s vow not to raise taxes, and from critics of Nevada’s prevailing wage law.

Described as a working draft, the coalition notes that the current economic downturn in Nevada has required the private sector to cut 179,400 jobs. The construction industry has cut its workforce by more than 50 percent.

The white paper offers five strategies to turn this around, the first being the creation of a Nevada Job Bonds Support Fund, a stable, dedicated revenue source for capital construction projects.

One option lawmakers should consider for creating such a fund would be a tax increase, either a one-quarter of a cent sales tax, a ten cent property tax levy, or an “infrastructure” surcharge imposed on all licensed vehicles, the coalition says.

Assuming $100 million in annual proceeds, this would increase bonding capacity to $1 billion over 20 years, enough to support 11,500 jobs and break ground on the hundreds of millions of dollars in state and local projects that have been on hold due to lack of funding but that are ready to build, the coalition says.

Pat Pusich, a Reno architect and the coalition’s co-chairman, said: “Without a comprehensive plan for exploiting its strengths and correcting its deficiencies, Nevada could find its position as an attractive place to live, work, invest and conduct business usurped as the nation’s economy heals.”

Senate Majority Leader Steven Horsford, D-Las Vegas, offered this statement on the proposal: “With nearly 15 percent of Nevadans looking for work, creating jobs is the top priority for everyone in our state. Any ideas to create jobs are welcome and needed. I’m thrilled that this collection of industry leaders has taken the initiative and I’ll be looking at their ideas closely.”

Sandoval on Wednesday reiterated his intent to veto any legislation that contains a tax increase, saying the Nevada business community cannot afford it.

Businesses are doing their fair share, and “they are doing whatever it takes to keep people employed,” he said. But talk of potential tax increases on the part of the Legislature is a concern in the business community, Sandoval said.

“They appreciate my position but there is a legislative session coming up,” he said. “So they are going to be watching very closely to see what the tax policy in this state is going to be.”

Specifically in response to the proposal, the Sandoval administration today said:

“The governor supports the goal of job creation, but believes it is best accomplished by private sector growth. The strategy of spending public money we don’t have may yield short-term gains for some, but do long-term damage to the economy as a whole.

“Since this is the first we’ve heard of the proposals, we are reviewing them with interest. The governor’s top priority is building and fostering a business environment which creates new jobs without adding to the tax burden or spending money Nevada doesn’t have.”

Sen. James Settelmeyer, R-Gardnerville, said the requirement that most public works jobs pay the prevailing wage is another concern with the proposal.

He cited a water quality project on the Carson River that Douglas County officials wanted to pursue with Question 1 bond funds approved by voters in 2002 for parks, water and wildfire needs. The project could have been done for $119,000, but because it exceeded the $100,000 threshold for capital projects, it fell under the prevailing wage law. The final estimated cost was $185,000 and there wasn’t enough money to do the project, Settelmeyer said.

The prevailing wage is set by an annual survey of both public and private construction projects. But with most of the projects in recent years being public works that must pay the prevailing wage, the surveys are skewed and labor rates are going up, he said.

“If we want to put people back to work, I’d rather put two guys back to work for $40 an hour each than give one guy $80 an hour, Settelmeyer said. “I’d rather help two families.”

It’s not right that prevailing wage rates are being pushed up each year while state workers are asked to take a pay cut, he said.

Settelmeyer, formerly a member of the Assembly, protested Nevada’s new prevailing wage rates along with several colleagues when they were announced last year by the Labor Commissioner, but the rates were allowed to take effect.

The Legislature, in a special session in February 2010 called to erase an $800 million shortfall, approved legislation removing a sunset on a voter-approved Clark County tax hike to use for bonding purposes for public works jobs.

The coalition says it is working with key lawmakers to pursue its proposals in the upcoming session.

Some of the projects the coalition says are ready to build include a new county jail for Churchill County at a cost of $50 million, and flood control improvements on the Muddy River in Clark County at a cost of $40 million to $50 million.

Members of the coalition include the Associated Builders and Contractors, the Builders Association of Northern Nevada, Electrical Workers Local 401, the National Association of Minority Contractors and many others.

Audio clips:

Gov. Brian Sandoval says the business community cannot afford a tax increase:

012011Sandoval1 :26 keep people employed.”

Sandoval says the business community is waiting to see what the Legislature does regarding taxes:

012011Sandoval2 :19 going to be.”

Sandoval says he will veto any budget with a tax increase:

012011Sandoval3 :06 will veto it.”

Nevada GOP Assembly Members Call For Suspension of Prevailing Wage on Public Construction

By Nevada News Bureau Staff | 2:54 pm October 7th, 2010

CARSON CITY – Members of the Republican Assembly Caucus today called on state Labor Commissioner Michael Tanchek to delay implementation of a new prevailing wage rate in Nevada until the Legislature has an opportunity to review the methodology.

The caucus is concerned a flawed process resulted in the new prevailing wage rate that took effect Oct. 1. There is a 30-day period to file an objection.

In a letter sent to the commissioner, the caucus is challenging the legitimacy of increases to the wage on public construction when the wage rates on private construction have decreased with current market conditions.

“When the wage rates being paid on public works projects are 43 percent higher on average than wage rates being paid in the private sector, something is wrong with the formula,” said Assembly Minority Leader Pete Goicoechea, R-Eureka. “All of us support a fair wage for those who do public construction but in these economic times we cannot afford a more than fair wage.”

According to an analysis done by the caucus, the average prevailing wage has gone up about 3 percent statewide with gains in some counties being offset by decreases in the rural counties. However, in Carson City where much of the construction for state government is performed, the proposed rate increase is nearly 8.5 percent.

“No one will dispute that the wage rate being paid by the private sector has gone down based on current economic conditions,” said Assemblyman James Settelmeyer, R-Gardnerville. “And Nevada’s own Department of Employment, Training and Rehabilitation’s reported wage rate confirms that, so how in the world can we have an increase in the cost of public construction labor? A flawed methodology for determining the rate, that’s how.”

The letter to Tanchek is a formal protest to the rates recently released by his office.

Tanchek was not immediately available for comment on the letter.

The letter says: “Frankly, we are stunned that in this economic environment where private sector construction has, for all intents and purposes, come to a complete halt, the average prevailing wage rate for public construction in Nevada could be increased.”

“We recognize that your office simply collects and reports this information based on a formula prescribed in state law,” the letter says. “However, given the unprecedented economic crisis we find ourselves in, the record unemployment we face and the staggering budget shortfall that will confront us in the next session, we felt compelled to submit this protest as a way to begin a public dialogue on this outrageous situation.”

State law requires the commissioner to survey contractors who have performed construction work during the past year in order to determine the prevailing wage rates. Prevailing wage rates are required to be paid on all Nevada public works construction projects such as schools, libraries, roads and government buildings costing more than $100,000.

The information obtained from the surveys is loaded into a computer program which calculates the prevailing wage rates on a county-by-county, job classification basis.

If no rates are reported for a craft in a county, the commissioner must rely on wage rates as reported for the nearest county that has a rate. Many times a low-population county can end up with the same rate as established in Clark County for a particular craft because no rural numbers were reported.

Goicoechea said: “We are faced with unprecedented economic challenges in this state. We have record high unemployment, we have implemented state worker furloughs, and we have asked our state agency heads to renegotiate contracts where possible; how can we, in good conscience, allow the cost of public construction to increase?”

“We all want to create new jobs, especially in construction, but simple economics dictates that if you overpay those currently working, the result is fewer new jobs,” Settelmeyer said.