Testimony on SB119: NPRI-proposed compromise would eliminate prevailing wage on school construction, limit bond rollover to 2 years

Victor Joecks

Hello, my name is Victor Joecks, and I’m with the Nevada Policy Research Institute. While this bill is currently not a good deal for taxpayers, the removal of the prevailing wage is very praiseworthy.

Prevailing wage requirements in Nevada add a 45 percent premium to labor costs and removing this requirement saves 10 to 15 percent on construction.  And to clarify, this bill would lower wage rates from $35 to $55 an hour to $25 to $40 an hour, which is a wage rate that would put construction workers above the median household income.

The problems with SB119 though involve the bond rollover. The biggest problem is that authorizing 10 additional years of bonding without voter approval is different than what voters were told when they voted for property tax increases in 1998 or 2002.

This is why we have proposed an amendment to authorize two years of additional bonding. This would allow the district to build immediately – their stated priority – while also making school districts return to voters in 2016 for longer approval.

One reason to return to voters is because the needs identified by the Clark County School District keep changing. In 2012, CCSD asked voters for a property tax increase. They identified 41 schools as needing repairs, at a cost of $669 million. Voters rejected that plan 2 to 1. Now, just  three years later, CCSD has a list of 45 schools to receive $286 million in funding.

Just six schools are on both lists. In 2012, five of those schools were scheduled to receive $700,000 for electrical system upgrades. Now, those five schools are scheduled to receive $4 million additions. Only one school, Boulder High School, is on both lists for the same project.

Also, CCSD has spent $338 million in previous bond funds on the 45 schools now scheduled to receive $286 million.

For our other amendment, I would like to propose a conceptual amendment to address the problem referred to by Sen. Settelmeyer. This concept would prevent other jurisdictions from taking property tax streams previously used by school districts without approval by the debt management commission and a popular vote.