Prevailing wage bills carry disruptive costs for schools

School district costs include more than teachers and delivering education services. Buildings cost money to maintain, especially with many schools being decades old. 

I spent a lot of time last week in committees other than the regular education committees to address these costs. Prevailing wage bills that could increase costs and derail current and future school projects are a real concern. 

Senate Bill 493 and House Bill 2419 would change how prevailing wages are set and could hurt the eight school districts going out for bonds in May. If passed, the bills would go into effect Jan. 1, 2022.  

The eight bond efforts confirmed with the Oregon Department of Education already have budgets locked in. But if one of the bills passes, a bid going out after Jan. 1 could require a wage rate increase higher than in the bond project budget. 

School board members know the work and engagement with community that is needed to get a bond ready to go, let alone the worry. Is the bond big enough for the projects? Did we budget correctly? Will the community support it? This just adds another complexity. 

In May, the Wallowa School District will be putting a $7 million bond with a $4 million Oregon School Capital Improvement Matching grant on the ballot for improvements and renovations. The bond focuses on heating, ventilation and electrical improvements; safety and security upgrades; and other limited additions and renovations to meet accessibility and code requirements. 

Wallowa Superintendent Tammy Jones said parents would like to see even more work done in schools that are more than 50 years old but there is only so much the community can afford to pay.

“With an increase in prevailing wages, our construction costs will be driven up considerably, and we will be able to accomplish even less than planned,” she said. “Not delivering on promises to our community creates trust issues that we cannot afford.”

The Enterprise School District is among the districts that passed a bond in November and could also be hurt because some projects won’t go out for bid until 2022. 

“The effects of having prevailing wages increased statewide would result in the voters of Enterprise, Oregon, to be misled,” said Enterprise Superintendent Erika Pinkerton. “If in fact the prevailing wages increase statewide, we will not be able to complete the projects presented to the voters in November as there will not be enough money to go around.”

Pinkerton added that the real problem is that students would not be receiving the education they deserve in safe and secure facilities. 

Don’t get me wrong. Good wages impact a local economy, which is important for the vitality of the community. The current process for setting prevailing wage is a wage survey and use of collective bargaining agreements that reflect the local wages. The current process for setting and updating prevailing wages has worked well, offering a predictable trend for budgeting.

These bills would take a more statewide approach to set wages. Prevailing wages would likely go up, especially in rural communities. Metro areas where wages are higher would be less affected. This is happening in Washington, where a similar law was passed.   

School buildings and facilities must be maintained. Small and rural schools already face challenges passing local bonds to keep up with the needs. COVID-19 has added to the infrastructure issues, creating shortages in materials and adding to expenses.

“COVID has put a stick in the spokes,” said Scott Rogers, Athena-Weston School Board Chair and senior project manager for the construction company Wenaha Group.

Rogers, OSBA Board president-elect, said the wage bills would hurt not just public schools, but all public agencies in his Columbia River Gorge region, as well as the Confederated Tribes of the Umatilla Indian Reservation.  

Please reach out to your legislators and ask them to rethink changing the prevailing wage rate at this time, what with all the other unpredictable and soaring costs schools are facing. 

OSBA offers a range of resources and additional assistance to support education advocacy, and you can contact anyone on the Legislative Services team to help.

- Lori Sattenspiel
Legislative Services director