Prevailing Wage Law Upheld

 

27

Aug. 2014

Supporters Hail Victory for Bipartisanship, Economy and California Taxpayers

San Diego – Today, San Diego Superior Court Judge Joel R. Wohlfeil issued a tentative ruling upholding Senate Bill 7 – a bipartisan law enacted in 2013 that is designed to encourage more of California’s Charter Cities to pay Prevailing Wage on locally-funded construction projects.

In response to today’s developments, Dale Howard, spokesperson for Smart Cities Prevail – California’s leading research and education authority on Prevailing Wage issues – issued the following statement:

“Today, a small group of California cities appear to have lost their bid to undermine our recovery and export more of California’s hard-earned tax dollars to fly-by-night contractors from out of state. Judge Wohlfeil’s tentative ruling to uphold SB7 is a victory for bipartisanship, our economy and California taxpayers.”

Supported by both Republicans and Democrats since the 1930s, Prevailing Wage policies have proven to ensure more construction projects are completed on-time, on-budget, with fewer injuries, more local workers, and $1.50 in economic activity for every dollar spent on a city project.

While most California cities are governed by General Law and enjoy the benefits of Prevailing Wage already, SB7 was enacted to encourage more of the state’s Charter Cities to convey these benefits and protections to local residents. Considering that a 2012 Los Angeles County Civil Grand Jury report found that Charter Cities were more likely to be in debt and make risky financial decisions, and one of the Charter Cities filling this lawsuit boasts the second-highest unemployment rate in the United States, it is clear that SB7 addresses a very real need.

With this tentative ruling, it appears that this law – already passed by wide marigins in the legislature and signed by Gov. Brown – is on its way to being affirmed by the courts. We are encouraged by what this ruling and full implementation of this law would mean for the future of California’s middle class.”

To read the entire ruling, click here.

Background:

Six cities – Carlsbad, El Cajon, El Centro, Fresno, Oceanside, and Vista – filed this lawsuit to contest the law earlier this year.

The formal hearing on this matter is scheduled in San Diego Superior Court on Thursday, August 28, at which time both sides will make their argument before a final ruling is issued. It is possible that the tentative ruling could be changed, but in light of the well-reasoned analysis in this ruling, that appears unlikely.

Prevailing Wage is the standard rate paid on publicly funded projects to a worker in a given trade, in a given region. Both non-union and union contractors perform Prevailing Wage work. The rate varies from region to region and is typically lower in rural areas than in large cities.

SB7, which took effect in January of this year, would limit access of Charter Cities to discretionary state construction funds if they don’t comply with Prevailing Wage provisions on all of their public works projects. The law would exclude contracts for projects of $25,000 or less for construction work, and projects of $15,000 or less for alteration, demolition, repair, or maintenance work. A large majority of California Charter Cities already have Prevailing Wage policies in place. The law was authored by Democratic State Sen. Darrell Steinberg and Republican State Sen. Anthony Cannella.

Smart Cities Prevail is a non-profit 501(c)(4) organization dedicated to providing complete research and education on the benefits of Prevailing Wage. More than 33,000 Californians have signed its petition in support of Prevailing Wage, which can be viewed here: http://www.change.org/p/help-rebuild-the-middle-class-support-prevailing-wage-4.

For more information, visit www.smartcitiesprevail.org.

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