EDITORIAL: Dumped reform means fewer schools at higher cost

The Nevada Legislature moved quickly at the start of the 2015 session to solve an urgent problem. Then, at the very end of the session, lawmakers repealed some of that fix to ensure part of the existing problem continues.

The final days of any regular session include frantic deal-making and sneaky maneuvering by special interests, but the bargain that compelled lawmakers to roll back the prevailing wage exemption contained in school construction legislation already signed into law was disappointing and counterproductive.

Back in February, majority Republicans and minority Democrats engaged in fierce debate over a bill that allows the Clark County School District to borrow about $3.6 billion against existing bonding authority without a vote of the people. It was the Legislature’s highest priority upon convening, because valley schools were bursting from enrollment growth and the system was out of capital funding. The school district needed to immediately begin construction on badly needed new schools in high-growth parts of the Las Vegas Valley — seeking approval of a new bond in the 2016 election would delay new school openings until at least 2019.

Both parties supported the bond rollover, but the compromise GOP lawmakers sought to justify bypassing the electorate — which had overwhelmingly rejected a property tax increase for school construction in 2012 — was a prevailing wage exemption for the projects the rollover would fund. Nevada’s prevailing wage law requires the state to set wages for public construction projects based on flawed surveys of union jobs, increasing costs by mandating above-market pay. Exempting school projects from the prevailing wage would cut millions of dollars from the cost of each school, allowing more schools to be built and renovated. The bond rollover was passed with bipartisan support, but the prevailing wage reform passed along party lines.

Democrats and their union base railed against the prevailing wage bill, claiming that paying construction workers market wages would hurt middle-class families. Never mind the harm to middle-class taxpayers by making them overpay for schools, or inefficiencies and distortions caused by having the government set wages.

But it turns out a deal was in place between Gov. Brian Sandoval, Democrats and Republican leadership to water down that prevailing wage exemption. All Democrats had to do was provide the votes Gov. Sandoval needed to increase taxes and balance his $7.3 billion budget, which contains hundreds of millions of dollars in new operating funding for schools.

And so, when the budget and tax increases were passed, lawmakers also sent to Gov. Sandoval a bill that requires workers on public school and college construction projects to be paid 90 percent of the hourly prevailing wage (charter schools would still be exempt). Additionally, the project cost threshold that triggers the prevailing wage drops from $500,000 to $250,000. While still higher than the current exemption of $100,000, the new threshold is still low enough to allow school districts to combine jobs and trigger the higher wages.

The result of this compromise will be fewer school projects at higher costs. For all the powerful education reforms passed by lawmakers and signed into law by Gov. Sandoval, this deal turned a good trade-off into bad policy. The taxpayers have lost again.