Michigan Repeal Prevailing Wages and Fringe Benefits on State Projects Initiative (2018)
| Michigan Repeal Prevailing Wages and Fringe Benefits on State Projects Initiative | |
|---|---|
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| Election date November 6, 2018 | |
| Topic Labor and unions | |
| Status Overturned | |
| Type State statute | Origin Citizens |
The Michigan Repeal Prevailing Wages and Fringe Benefits on State Projects Initiative was an indirect initiated state statute in Michigan that the state legislature voted to approve on June 6, 2018. If the legislature failed to act on the indirect initiative, the measure would have appeared on the ballot on November 6, 2018.
The measure repealed the state law requiring that workers be paid prevailing wages and fringe benefits on state projects that the state pays for in part or in whole. The initiative contained an appropriation of $75,000 in the 2017-2018 fiscal year for implementation.[1]
Under the prevailing wage law, coded as 1965 PA 166, the state department of labor determined the prevailing wage and benefits required for each type of contractor or mechanic prior to advertising for contract bids. The wages were determined according to wages paid for similar projects in the local jurisdiction "under collective agreements or understandings between bona fide organizations of construction mechanics and their employers." As the initiative removed this requirement, contractors that provided wages and benefits below the prevailing wage and benefit levels were made eligible to bid on state projects. The prevailing wage law was enacted in 1965.[1]
Aftermath
Governor Gretchen Whitmer (D) signed into law House Bill 4007 (HB 4007) on March 24, 2023, which reinstated the prevailing wage law and repealed the initiative. Gov. Whitmer previously approved the prevailing wage for some state-funded projects in 2021, but HB 4007 included local government projects as well. Gov. Whitmer said: "Today, we are coming together to restore workers’ rights, protect Michiganders on the job, and grow Michigan's middle class. Michigan workers are the most talented and hard-working in the world and deserve to be treated with dignity and respect."[2]
Michigan House Republican Leader Matt Hall (R) said: "Gov. Whitmer and Democrats have hurt Michigan’s ability to compete to attract high-paying careers. Without right-to-work, businesses will find more competitive states for their manufacturing plants and research and development facilities, and workers and careers will drift away."[2]
Vote in the state legislature
According to Jeff Wiggins, president of the support committee Protecting Michigan Taxpayers, the goal of proponents was to have the Michigan State Legislature vote on and approve the ballot initiative.[3] Wiggins said, "We are confident state lawmakers will do what is best for Michigan taxpayers and eliminate this costly carve-out."[4] He also stated that he was "very confident we have the votes."[5] As of 2018, Republicans controlled both the state Senate and state House.
As the initiative was indirect, the legislature had 40 days to adopt or reject the proposal. On June 6, 2018, the legislature enacted the initiative, keeping the proposal off the ballot.
In the state House, the vote was 56 to 53. In the state Senate, the vote was 23 to 14. Most legislative Republicans supported the initiative. Seven Republicans in the state House joined Democrats in opposing the proposal. Four Republicans in the state Senate joined Democrats in opposing the proposal.[6]
Gov. Rick Snyder (R) opposed repealing the prevailing wage law. Unlike a bill, however, an indirect initiative is veto-proof in Michigan, meaning Gov. Snyder could not veto the initiative.[7]
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Text of measure
Petition title
The petition language used for circulation was as follows:[1]
| “ | An initiation of legislation to repeal 1965 PA 166, entitled “An act to require prevailing wages and fringe benefits on state projects; to establish the requirements and responsibilities of contracting agents and bidders; and to prescribe penalties” (MCL 408.551 to 408.558); and to provide for an appropriation for related purposes. If not enacted by the Michigan Legislature in accordance with the Michigan Constitution of 1963, the proposed legislation will be voted on at the November 6, 2018 General Election.[8] | ” |
Full text
The measure repealed Michigan Compiled Laws 408.551 to 408.558. The following text was repealed:[9]
408.551 Definitions. Sec. 1. As used in this act: (a) “Construction mechanic” means a skilled or unskilled mechanic, laborer, worker, helper, assistant, or apprentice working on a state project but shall not include executive, administrative, professional, office, or custodial employees. (b) “State project” means new construction, alteration, repair, installation, painting, decorating, completion, demolition, conditioning, reconditioning, or improvement of public buildings, schools, works, bridges, highways, or roads authorized by a contracting agent. (c) “Contracting agent” means any officer, school board, board or commission of the state, or a state institution supported in whole or in part by state funds, authorized to enter into a contract for a state project or to perform a state project by the direct employment of labor. (d) “Commissioner” means the department of labor. (e) “Locality” means the county, city, village, township, or school district in which the physical work on a state project is to be performed. 408.552 Contracts for state projects; minimum wage provisions, exceptions. Sec. 2. Every contract executed between a contracting agent and a successful bidder as contractor and entered into pursuant to advertisement and invitation to bid for a state project which requires or involves the employment of construction mechanics, other than those subject to the jurisdiction of the state civil service commission, and which is sponsored or financed in whole or in part by the state shall contain an express term that the rates of wages and fringe benefits to be paid to each class of mechanics by the bidder and all of his subcontractors, shall be not less than the wage and fringe benefit rates prevailing in the locality in which the work is to be performed. Contracts on state projects which contain provisions requiring the payment of prevailing wages as determined by the United States secretary of labor pursuant to the federal Davis-Bacon act (United States code, title 40, section 276a et seq) or which contain minimum wage schedules which are the same as prevailing wages in the locality as determined by collective bargaining agreements or understandings between bona fide organizations of construction mechanics and their employers are exempt from the provisions of this act. 408.553 Prevailing wage and fringe benefit rates; schedule as part of specifications and bid form. Sec. 3. A contracting agent, before advertising for bids on a state project, shall have the commissioner determine the prevailing rates of wages and fringe benefits for all classes of construction mechanics called for in the contract. A schedule of these rates shall be made a part of the specifications for the work to be performed and shall be printed on the bidding forms where the work is to be done by contract. If a contract is not awarded or construction undertaken within 90 days of the date of the commissioner's determination of prevailing rates of wages and fringe benefits, the commissioner shall make a redetermination before the contract is awarded. 408.554 Prevailing wages and fringe benefit rates; establishment; public hearings. Sec. 4. The commissioner shall establish prevailing wages and fringe benefits at the same rate that prevails on projects of a similar character in the locality under collective agreements or understandings between bona fide organizations of construction mechanics and their employers. Such agreements and understandings, to meet the requirements of this section, shall not be controlled in any way by either an employee or employer organization. If the prevailing rates of wages and fringe benefits cannot reasonably and fairly be applied in any locality because no such agreements or understandings exist, the commissioner shall determine the rates and fringe benefits for the same or most similar employment in the nearest and most similar neighboring locality in which such agreements or understandings do exist. The commissioner may hold public hearings in the locality in which the work is to be performed to determine the prevailing wage and fringe benefit rates. All prevailing wage and fringe benefit rates determined under this section shall be filed in the office of the commissioner of labor and made available to the public. 408.555 Prevailing wage and fringe benefit rates; posting by contractors. Sec. 5. Every contractor and subcontractor shall keep posted on the construction site, in a conspicuous place, a copy of all prevailing wage and fringe benefit rates prescribed in a contract and shall keep an accurate record showing the name and occupation of and the actual wages and benefits paid to each construction mechanic employed by him in connection with said contract. This record shall be available for reasonable inspection by the contracting agent or the commissioner. 408.556 Prevailing wages and fringe benefits; failure to pay, termination of contract; contractor's liability and sureties. Sec. 6. The contracting agent, by written notice to the contractor and the sureties of the contractor known to the contracting agent, may terminate the contractor's right to proceed with that part of the contract, for which less than the prevailing rates of wages and fringe benefits have been or will be paid, and may proceed to complete the contract by separate agreement with another contractor or otherwise, and the original contractor and his sureties shall be liable to the contracting agent for any excess costs occasioned thereby. 408.557 Violation of act; penalty. Sec. 7. Any person, firm or corporation or combination thereof, including the officers of any contracting agent, violating the provisions of this act is guilty of a misdemeanor. 408.558 Inapplicability of act. Sec. 8. The provisions of this act shall not apply to contracts entered into or the bids made before the effective date of this act. |
Support
Protecting Michigan Taxpayers led the campaign in support of the initiative.[10] Jeff Wiggins, state director of Associated Builders and Contractors of Michigan, was president of Protecting Michigan Taxpayers.[3]
Supporters
- Associated Builders and Contractors of Michigan[3]
Arguments
- Jeff Wiggins, president of Protecting Michigan Taxpayers, said, "We’re overcharging taxpayers for public construction projects. This is something where we’re starting to see Michigan become less competitive."[3]
Opposition
Protect Michigan Jobs, also known as Michigan Prevails, led the campaign in opposition to the initiative.[11]
Arguments
Protect Michigan Jobs, the committee registered to oppose the initiative, said the following in defense of the prevailing wage law in Michigan:[11]
| “ |
Prevailing Wage is a historic American practice establishing minimum labor standards on public projects that dates back over 100 years. Michigan’s prevailing wage law mandates that construction workers on state-financed construction projects are paid fair, standardized wages and benefits. Projects such as the Flint’s Bishop International Airport, the Michigan State Police headquarters and primary and secondary schools across the state were all built using prevailing wage. Under prevailing wage, both union and non-union workers are able to securely provide for their families. The Prevailing Wage law also allows for safety and training programs that are rigorous and hands-on. With prevailing wage in place, Michigan’s skilled tradespeople can safely build the vital infrastructure our state needs with craftsmanship and quality.[8] |
” |
Campaign finance
| Total campaign contributions: | |
| Support: | $1,553,820.57 |
| Opposition: | $782,027.62 |
There was one ballot question committee (BQC), Protecting Michigan Taxpayers, registered in support of the measure. The committee raised $1.55 million and expended $1.54 million.[12][13]
The top contributor to the Protecting Michigan Taxpayers BQC was the Associated Builders and Contractors of Michigan (ABC of Michigan), which donated $1.31 million of the campaign's funds.[13] Jeff Wiggins, state director of Associated Builders and Contractors of Michigan and president of Protecting Michigan Taxpayers, said ABC of Michigan was backing the initiative because "[i]t's always been one of our biggest issues." He added, "The organization was formed specifically to combat laws like prevailing wage and promote principles that embrace the free market and fair competition, whether it’s ‘right to work’ or the removal of discriminatory labor agreements."[5]
There was one committee, Protect Michigan Jobs, registered in opposition to the initiative. The committee raised $782,028 and expended $557,555.[14]
The top contributor to the Protect Michigan Jobs BQC was the Michigan Building & Construction Trades Council, which contributed $108,825.[14]
Support
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Donors
The following were the top five donors who contributed to the support committee:[13]
| Donor | Cash | In-kind | Total |
|---|---|---|---|
| Associated Builders and Contractors of Michigan | $1,288,500.00 | $23,855.36 | $1,312,355.36 |
| Silver Bullet Group Inc. | $100,025.00 | $0.00 | $100,025.00 |
| Construction Legal Rights Foundation | $75,000.00 | $0.00 | $75,000.00 |
| September Group LLC | $50,000.00 | $0.00 | $50,000.00 |
| Americans for Prosperity - Michigan | $0.00 | $15,780.99 | $15,780.99 |
Opposition
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Donors
The following were the top five donors who contributed to the opposition committee:[13]
| Donor | Cash | In-kind | Total |
|---|---|---|---|
| Michigan Building & Construction Trades Council | $85,000.00 | $23,825.00 | $108,825.00 |
| Michigan Pipe Trades Association | $75,000.00 | $0.00 | $75,000.00 |
| Michigan Chapter of the National Electrical Contractors Association | $500.00 | $59,637.58 | $60,137.58 |
| Mid Michigan Electrical Alliance | $59,650.00 | $0.00 | $59,650.00 |
| Michigan Laborers' District Council | $50,000.00 | $0.00 | $50,000.00 |
Reporting dates
Michigan ballot question committees filed a total of six campaign finance reports in 2018. The filing dates for reports were as follows:[15]
| 2017 campaign finance reporting dates | ||
|---|---|---|
| Date | Report | Period |
| 1/31/2018 | Annual Report for 2017 | 1/01/2017 - 12/31/2017 |
| 2/15/2018 | Report #1 | 1/01/2018 - 2/10/2018 |
| 4/25/2018 | Report #2 | 2/11/2018 - 4/20/2018 |
| 7/25/2018 | Report #3 | 4/21/2018 - 7/20/2018 |
| 10/26/2018 | Report #4 | 7/21/2018 - 10/21/2018 |
| 12/06/2018 | Report #5 | 10/22/2018 - 11/26/2018 |
| 1/31/2019 | Annual Report for 2018 | 1/01/2018 - 12/31/2018 |
Methodology
To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.
Background
2015-2016 legislation and initiative
In 2015, the Michigan Senate approved a three-bill package to repeal the prevailing wage law. The vote was 22 to 15 on all three bills in the package.[16] One of the bills, Senate Bill 3, contained an appropriation of $75,000. Sen. David Robertson (R-14), a repeal supporter, said the appropriation would help the state "implement and disseminate information" about the repeal. The appropriation had the effect of making the bill ineligible for a veto referendum. Sen. Rebekah Warren (D-18), a repeal opponent, stated, "If we truly believe it costs $75,000, we should look for it in the budget that is before us and keep politics out of it."[17] The three-bill package did not come up for a vote in the Michigan House of Representatives. The vote in the state Senate on the three bills was as follows on each bill:[18]
| Vote in the Michigan State Senate | |||
| Requirement: Majority (50 percent plus one) vote of all members serving in each chamber | |||
Number of yes votes required: 20  | |||
| Yes | No | Not voting | |
|---|---|---|---|
| Total | 22 | 15 | 1 |
| Total percent | 57.89% | 39.47% | 2.63% |
| Democrat | 0 | 10 | 1 |
| Republican | 22 | 5 | 0 |
Gov. Rick Snyder (R) said a repeal would "hurt his ongoing push to expand the State’s skilled trades workforce."[19] On May 19, 2015, Gov. Snyder declined to answer a question regarding whether he would veto a prevailing wage bill or not, although he said, "I have serious problems with prevailing wage (repeal), and I think I would much rather work on skilled trades jobs in our state by partnering with the very people that would be adversely affected."[20]
Protecting Michigan Taxpayers, the same committee backing the 2017 initiative, proposed an initiative to repeal the prevailing wage in 2015. Collecting enough signatures for the indirect initiative would have allowed legislators to approve the bill without Gov. Snyder's signature. In Michigan, the governor cannot veto initiatives that citizens collected signatures for and the legislature voted to approve.[21] The initiative, however, did not make the ballot for 2016.[22]
2017-2018 legislative session
During the legislative session of 2017-2018, Senate Bills 1, 2, and 3 were filed to repeal the prevailing wage in total or in part. Sens. David Robertson (R-14), Peter MacGregor (R-28), Dave Hildenbrand (R-29), and Arlan Meekhof (R-30) sponsored the bills. As of November 2017, the bills remained in the Michigan Competitiveness Committee.[23]
As of November 2017, Republicans controlled both the state Senate 27-11 and state House 63-45.
Path to the ballot
Process in Michigan
In Michigan, the number of signatures required to qualify an initiated state statute for the ballot is equal to 8 percent of votes cast for governor in the last gubernatorial election. Signatures older than 180 days are invalid, which means all signatures must be collected within a 180-day window. Petitions for initiated statutes must be filed 160 days prior to the election. Successful initiative petitions are sent to the legislature, which then has 40 days to pass the proposed law. If the legislature does not approve the initiative, it goes on the ballot. If the legislature approves the initiative, it becomes law without needing the signature of the governor.
The requirements to get an initiated state statute certified for the 2018 ballot:
- Signatures: 252,523 valid signatures were required.
- Deadline: The deadline to submit signatures was May 30, 2018.
Signature petitions are filed with the secretary of state and verified by the board of state canvassers using a random sample method of verification.
Details on initiative
An application for the Repeal Prevailing Wages and Fringe Benefits on State Projects Initiative was filed with the secretary of state's office on May 16, 2017. The Board of State Canvassers approved the petition for signature gathering on May 18, 2017.
On November 3, 2017, proponents turned in around 380,000 unverified signatures. About 66 percent of the total submitted signatures need to be valid.[24] On January 9, 2018, the Michigan Bureau of Elections announced that a random sample of 535 signatures found that 370 were valid—three short of the number required for the bureau to recommend certification.[25]
Protecting Michigan Taxpayers asked the state Bureau of Elections to send the initiative to the state legislature without a second review of signatures. Staff with the elections department recommended that the state Board "maintain the signature review procedures and follow the established, statistically sound random sampling methodology."[26] On January 30, 2018, the board rejected Protecting Michigan Taxpayers' request and decided to conduct a larger sample of roughly 4,000 signatures.[27]
On April 23, 2018, the staff of the Michigan Department of State finished a random sample of 4,443 signatures for the initiative. A total of 268,403 signatures were estimated as valid—15,880 more signatures than was required.[28]
The Michigan Board of Canvassers was deadlocked on certifying signatures in a 2-2 vote on April 26, 2018. The state Board of Canvassers included four members—two Democrats and two Republicans. The two Republicans voted to approve the signatures, while the two Democrats voted to reject certification.[29] The Democrats cited petitions from circulators who listed non-residential buildings as residential addresses, which was in violation of a state law requiring circulators to use a proper address. Attorney General Bill Schuette (R) said that while circulators could be prosecuted for violating the law, he did not believe that this could be a reason to reject petitions. Julie Matuzak, a Democratic board member, stated, "I think there is a real and legitimate legal conflict that needs to be sorted out either by the Legislature or the courts." Norman Shinkle, a Republican board member, said, "I think it’s our job to follow staff recommendations, as we have done."[30]
The campaign in support of the initiative filed a lawsuit in the Michigan Court of Appeals.[30] On May 11, 2018, the state Court of Appeals, in a unanimous three-to-zero ruling, ordered the Board of Canvassers to accept signatures for the ballot initiative and send the initiative to the state legislature for consideration.[31] The Michigan Supreme Court stayed the lower court's order on May 15, 2018, stopping signatures from certified until the court made a decision on whether to take up the case.[32] On May 30, 2018, the state Supreme Court rejected the appeal, requiring the board of canvassers to certify the initiative petition. On June 1, 2018, the Michigan Board of Canvassers voted 4-0 to certify the initiative petition, sending it to the legislature.[33] [34]
Cost of signature collection:
Sponsors of the measure hired National Petition Management to collect signatures for the petition to qualify this measure for the ballot. A total of $1,283,724.99 was spent to collect the 252,523 valid signatures required to put this measure before voters, resulting in a total cost per required signature (CPRS) of $5.08.[13]
See also
External links
Footnotes
- ↑ 1.0 1.1 1.2 Michigan Secretary of State, "Protecting Michigan Taxpayers," accessed June 2, 2017
- ↑ 2.0 2.1 Detroit Free Press, "Whitmer repeals right-to-work, reinstates prevailing wage in Michigan," March 23, 2023
- ↑ 3.0 3.1 3.2 3.3 Bridge Michigan, "Which 2018 Michigan ballot issues are going strong. Or going down," November 27, 2017
- ↑ Detroit Free Press, "Petitions turned in to repeal Michigan prevailing wage law," November 3, 2017
- ↑ 5.0 5.1 The Detroit News, "Prevailing wage foes on track despite Snyder opposition," July 27, 2017
- ↑ Detroit Free Press, "Prevailing wage repealed by Republicans in the Michigan Legislature," June 6, 2018
- ↑ Associated Press, "Michigan Legislature poised to repeal prevailing wage law," June 4, 2018
- ↑ 8.0 8.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Michigan Legislature, "Michigan Compiled Laws 408.551 to 408.558," accessed June 2, 2017
- ↑ Detroit Free Press, "Michigan OKs form of marijuana, prevailing wage petitions," May 18, 2017
- ↑ 11.0 11.1 Protect Michigan Jobs, "Homepage," accessed November 27, 2017
- ↑ Michigan Secretary of State, "2018 Ballot Proposals," accessed November 20, 2017
- ↑ 13.0 13.1 13.2 13.3 13.4 Michigan Secretary of State, "Protecting Michigan Taxpayers BQC," accessed November 27, 2017
- ↑ 14.0 14.1 Michigan Secretary of State, "Protect Michigan Jobs BQC," accessed November 27, 2017
- ↑ Michigan Secretary of State, "Campaign Finance Filing Schedule," accessed November 20, 2017
- ↑ MLive, "Michigan Senate approves prevailing wage repeal," May 14, 2017
- ↑ MLive, "Michigan prevailing wage repeal bills advance with addition of referendum-proof appropriation," May 13, 2017
- ↑ Michigan Legislature, "Journal of the Senate," May 14, 2014
- ↑ Institute for Public Policy and Social Research, "Michigan's Prevailing Wage," May 5, 2017
- ↑ MLive, "Michigan Gov. Rick Snyder has 'serious problems' with prevailing wage repeal bills," May 19, 2015
- ↑ Detroit Free Press, "The GOP plan to beat Snyder, labor on prevailing wage," June 15, 2017
- ↑ Detroit Free Press, "Group won't get prevailing wage repeal on November ballot," May 27, 2017
- ↑ Michigan Legislature, "Labor: Hours and Wages Bills," accessed November 27, 2017
- ↑ Associated Press, "Petitions turned in to repeal Michigan prevailing wage law," November 3, 2017
- ↑ The Detroit News, "Prevailing wage repeal signatures face extra scrutiny," January 9, 2018
- ↑ Bridge Michigan, "Group against Michigan's prevailing wage asks to skip signature review," January 29, 2018
- ↑ The Detroit News, "Board orders review of prevailing wage repeal signatures," January 30, 2018
- ↑ Michigan Department of State, "Staff Report," accessed April 26, 2018
- ↑ Click on Detroit, "Michigan elections board deadlocks on 'prevailing' wage measure for 2018 ballot," April 26, 2018
- ↑ 30.0 30.1 The Detroit News, "Prevailing wage repeal advocates promise court fight," April 26, 2018
- ↑ U.S. news, "Michigan Court Clears Way for Initiative to Repeal Wage Law," May 11, 2018
- ↑ The Detroit News, "High court puts prevailing wage repeal vote on hold," May 15, 2018
- ↑ Detroit News, "Repeal plan on prevailing wage moves ahead," June 1, 2018
- ↑ WDIO, "Mich. Prevailing Wage Bill to Proceed after Court Declines Appeal," May 30, 2018
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