New construction projects that cost less than $3.5 million would not be subject to Ohio's prevailing wage law, according to the proposed state budget passed by the Ohio House of Representatives last week.
It's just one of several revisions to the budget passed by the House.
The current prevailing wage threshold is just $79,000.
"That threshold was set so that smaller local projects could be done with local contractors but larger projects are much more detailed and require more skilled people, which is what we provide," said Bill Hutchinson, business manager for the Parkersburg-Marietta Building Trades Council.
"But this is just another attack on the working middle class in Ohio and it will allow more outside contractors to come in, do a low-quality job and take the money back out of the state," he said. "That's what the prevailing wage was designed to prevent."
Hutchinson said local labor groups are keeping a close eye on the budget legislation-House Bill 153- that passed on a 59-40 party line vote in the Republican-controlled House, then moved into the Democrat-controlled Ohio Senate last week.
At a glance
The Ohio House of Representatives passed a $112 billion biennial budget May 5.
The budget bill, House Bill 153, is now in the Ohio Senate.
The proposed budget covers fiscal years 2012 and 2013, and is due for passage by June 30.
For info on HB 153, go to the Ohio Office of Budget Management Web site, obm.ohio.gov
June 30 deadline
The prevailing wage exemption for higher-priced projects is among several issues the senators will now deal with as the legislature works toward the June 30 deadline for adoption of the state's next biennial budget.
State Sen. Jimmy Stewart, R-Athens, said he expects to see the prevailing wage threshold lowered.
"That's one area where I look for some changes to be made," he said. "It's too early to tell what those changes will be but there will be considerable debate on this issue and I would fully anticipate a lower number will come out of the Senate."
Stewart said Wednesday that the Senate was continuing to hear testimony from the administration and the public as the legislators begin their work on HB 153.
"There's a wide difference of opinion among senators on this bill," he said.
Also contained in the House-passed legislation is the elimination of the estate tax beginning in 2013, the sale of six state prisons to private operators, cuts in the Local Government Fund, reduction in basic aid to school districts and less regulation of charter schools.
"I voted against the budget when it passed the House last week," said Rep. Debbie Phillips, D-Athens.
"I have very deep concerns about cuts to important services in our community, particularly the local government funds and the cuts to education," she said.
"We did attempt to make some amendments dealing with oversight and accountability for charter schools, but that amendment was tabled essentially along party lines," Phillips said."There are sweeping policy changes proposed in this budget that I have serious concerns about, and I feel some of those changes should be considered in separate legislation," she added.
But Rep. Andy Thompson, R-Marietta, said he thinks HB 153 is a balanced state budget that closes the $8 billion budget gap the state was facing when Gov. John Kasich's administration took office in January.
"When you have an $8 billion hole to fix, you won't have a lot of happy campers," he said.
Thompson said eliminating the estate tax is a big step in the right direction.
"We lose a lot of family farms and entrepreneurs because of this tax," he said. "How do we get estates? From people who save and invest and don't rely on government support. But then we punish them for that with this death tax."
The tax is levied on estates valued at more than $338,333. Each year the estate tax provides approximately $250 million for cities and other local governments. Another $60 million from the tax goes to the state.
An estate tax windfall recently helped bolster the city of Marietta's 2011 budget and will likely prevent furlough days and a pay freeze for city employees. Past estate tax windfalls have also helped keep the city's finances in the black.
Thompson said although the elimination of the tax is set to begin in 2013, according to HB 153, local governments will still receive the funding from estates that won't be completely settled by that deadline for a couple more years.
The 2013 timeline also gives local governments time to plan ahead and make necessary adjustments before the tax is completely eliminated, he said.
Thompson said other portions of HB 153 restore some school funding.
The bill provides $80 million more for school districts over the next two years than was originally proposed by the governor earlier this year.
Thompson said a provision that school districts would not lose more than 20 percent of basic state aid would have an impact on the state's more wealthy school districts and not on most southeast Ohio school districts.
Local Government Funding the state shares with cities, counties and townships, will be cut 25 percent in 2012, and 50 percent in 2013, according to HB 153. But a $100 million fund would be created to encourage local governments to combine services.
"This would provide grants for cities, townships, and counties that collaborate or combine services to help with startup costs," Thompson said.
But in a news release last week, Thompson also noted that the House-passed budget bill ensures local governments will receive either their fiscal 2011 Local Government Fund allocation, or at least $500,000.