Study: School construction costs down

29 August 2018

(The Journal, WV)

MARTINSBURG — The repeal of West Viriginia’s prevailing wage mandate has produced a decline in school construction costs, according to a study by the University of Kentucky’s Center for Business and Economic Research released Monday.

Since the repeal of West Virginia’s prevailing wage law in 2016, total costs of public school construction in West Virginia has declined by over 7 percent, the study said. Additionally, the report indicted there was no evidence that repealing the state’s prevailing wage mandate affected the building or quality of construction of state school buildings constructed since the repeal.

Adopted in 1933, and largely unchanged since 1961, the prevailing wage mandate required any contractors performing public construction work to pay a certain hourly minimum wage rate and provided a certain level of “fringe benefits,” or payment in lieu of the fringe benefits.

According to the CBER study, public school construction costs in West Virginia rose steadily between 2008 and 2016. After the state’s prevailing wage was repealed, construction costs stopped rising and then started to decline.

“What we have with this study is a very close and thorough examination of what is ultimately a very difficult topic to properly evaluate,” said Bryan Hoylman, president and CEO of the Associated Builders and Contractors of West Virginia. “The CBER took the time to look at the effects this policy decision has had from a variety of angles and under an impartial lens. The evidence here clearly speaks for itself.”

ABC is a national trade association representing the non-union construction industry. An association of 70 chapters with 21,000 commercial contractors and construction-related firms, ABC was founded in Baltimore, Maryland in 1950 with a charter to advocate for free enterprise and open competition in the U.S. construction industry.

“These findings equate to roughly $1 million taxpayers have saved and will continue to save on each new elementary school built in West Virginia. That’s substantial,” Hoylman said.

The CBER is the first major study to be completed since state legislators debated and repealed the mandate during the 2016 Legislative Session.

Opponents of the repeal predicted a negative impact on workforce, safety and quality of public construction, while proponents predicted it would remove bureaucracy in setting public construction costs, handing it over to the free market by using bidding projects similarly to the private sector.

“West Virginia lawmakers stood by their promise to side with the state’s taxpayers over wealthy and powerful special interest groups when they repealed the requirement to pay prevailing wage on public improvements in 2016,” Hoylman said.