On July 22, Illinois Gov. Bruce Rauner vetoed a bill that would have significantly changed the prevailing wage calculation process by tying wage rates to union collective bargaining agreements. In vetoing the bill, Gov. Rauner said Senate Bill 2964 would effectively discount the wage rates of those who have chosen not to join a union and who make up a majority of the construction workforce.

“To limit the prevailing wage to the wage specified in a collective bargaining agreement would mean disregarding all those workers whose wages are not set by that agreement,” said Gov. Rauner in his veto message. “Senate Bill 2964 would fix prevailing wage to the wage applicable to as few as 30 percent of the workers in a given trade, meaning that the wage applicable to the remaining 70 percent of workers would be disregarded.” He also noted that the bill would raise the cost of taxpayer-funded projects and take too much power from local governments in determining their own prevailing wage rates.

ABC of Illinois President Alicia Martin expressed support for Gov. Rauner’s veto and referenced a 2014 study released by the Anderson Economic Group that showed prevailing wage rates increased school construction costs by about $1 billion over a decade-long period. “Each year, $2.9 billion in school construction expenditures are subject to Illinois’ prevailing wage laws. From 2002 to 2011, this amounted to over $29 billion. In absence of prevailing wage, the study estimated Illinois taxpayers could have saved $158 million each of the past 10 years,” she said.

In addition to his veto, Gov. Rauner also outlined a number of technical changes to the bill, including some that would preserve the authority of local governments in calculating and setting prevailing wage rates. The legislature may try to override the governor’s veto later this year.