The groundswell of objection to Illinois Senate Bill 43 continues to rise as legislators consider a compromise measure to a standing bill that would extend prevailing wage law into TIF districts and enterprise zones - even for private-sector projects that aren't being built with any public dollars.
At press time, an amendment was afoot that would require only those properties receiving direct benefit from TIF or EZ to pay prevailing wage on work within these territories, rather than mandating that all properties located with a TIF or EZ pay prevailing wage.
Among those organizations lobbying to keep SB 43 (HB 63) from becoming law is the Illinois Chamber of Commerce. Todd Maisch, vice president of government affairs, says the bill - which mandates prevailing wage for maintenance as well as new construction and has no sunset date - is troubling.
"We're very, very concerned," said Maisch. "The timing of this proposal (by Sen. James Clayborne, D-Belleville) couldn't be worse. It would seek to take two very important economic development tools and make them into zones of economic avoidance. One hundred percent of privately funded projects would still have to pay prevailing wage. You could actually see a situation in some communities for a human cry to dissolve the TIF (tax increment financing district) or EZ because the labor costs were too expensive," he added.
Maisch says that although organized labor is touting SB 43 as a good measure toward ensuring fair pay and quality projects in Illinois, the reality could be the opposite.
"Unfortunately, what they don't see is that there are going to be fewer projects around for them (labor) to work on," Maisch said.
Another amendment has been filed to address business' concerns; it exempts businesses who were already located in an area that later became a TIF or EZ. Maisch says the amendment doesn't go far enough.
"Enterprise zones are increasingly being used as an incentive for wind farms and other large projects that Illinois attracts," he said.
Walter Denton, city administrator in O'Fallon and president of the Southwestern Illinois City and County Managers' Association, questions why the General Assembly would support a bill that works in opposition to incentives already in place that help keep Illinois on the site location short list to attract new industry.
"From our point of view, we can't understand why a business would be interested in locating within an enterprise zone under these constraints," Denton said. "Where's the deal? How do you attract a business if you have to tell them, 'We're in an enterprise zone, but you have to pay prevailing wage forever.'"
O'Fallon recently decided to postpone the expansion of the MidAmerica Enterprise Zone and wait and see what happens to Clayborne's bill.
Clayborne did not return phone calls in conjunction with SB 43.
Marc Poulos, executive director for the Indiana, Illinois, Iowa Foundation for Fair Contracting, takes issue with the argument that prevailing wage is going to cost more.
"If you put a pencil and paper to it, the reality of it is that the cost variables are minimal," said Poulos. "Labor costs are typically about 25 percent of the total job. And on average, prevailing wage rates are roughly 10 percent more. On a $1 million construction job, for example, with $250,000 in labor costs, you're talking about a $25,000 difference. We just don't buy that argument. If labor costs were 60 or 70 percent of the job, it would be different. There's also the point that if you pay someone more, they'll be more productive," he added.
Joe McCoy, senior legislative advocate for the Illinois Municipal League, says the real issue specific to SB 43 are its anti-competitive provisions.
"We are concerned that SB 43 would significantly impair economic development benefits that are derived from the TIFs and EZs," said McCoy. "This is a huge grab for Illinois projects by organized labor. There are several prevailing wage bills out there this session, but SB 43 is the crown jewel of onerous bills. Many times, Sen. Clayborne has been on the side of local government, but this isn't one of those times." |
