A bill awaiting consideration in the House of Representatives could collectively save Delaware taxpayers tens of millions of dollars annually. House Bill 296, sponsored by State Rep. Bryan Shupe (R-Milford South), would allow school district and charter school officials to decide whether to pay ‘prevailing wage’ rates for school construction projects.
The prevailing wage is the state-mandated minimum wage paid to workers employed on any project where state funds are used. The Delaware Department of Labor sets the rates annually based on a survey of employers. The rates vary by occupation, type of project, and the county where the work is being performed. However, Delaware’s methods for setting this wage scale have long been criticized for being flawed and inaccurate, producing results far exceeding market conditions.
“The prevailing wage mandate inflates the bottom line of any project using state money by at least 15% to 20%,” Rep. Shupe said. “The result is roads and schools that cost much more than they should, leaving taxpayers to dig deeper into their pockets.”
In The First State, school construction costs are split between the state and local school districts, typically 70% to 30%, respectively. The prevailing wage rate applies to the entire project because of the inclusion of state money.