MODESTO — Political battle lines are being drawn over whether to extend California's prevailing wage regulations to charter cities such as Modesto and Stockton.
The term "prevailing wage," defined as the hourly pay and benefits benchmark on public works projects, has become code in recent decades for "union wages." California's prevailing wage laws mean that all construction project bidders are required to use the same rates of pay.
The state's 121 charter cities have been exempt.
State Sens. Anthony Cannella, R-Ceres, and Darrell Steinberg, D-Sacramento, want to change that.
They've introduced Senate Bill 7 to close what Cannella describes as a "loophole that allows certain firms to game the system."
Jeff Macedo, a spokesman for Cannella's office in Sacramento, said the loophole gives some firms an unfair advantage. Since they're not required to pay their employees a prevailing wage, they can underbid competing construction firms, he said.
Standing in opposition are the San Joaquin Taxpayers Association, the League of California Cities, the Howard Jarvis Taxpayers Association and more than a dozen cities.
The league, saying its opposition "rests on the fundamental principle of local control," claims that the legislation would allow the state to micromanage municipalities.
Modesto Mayor Garrad Marsh, in a March 13 letter to Cannella and Steinberg, said the legislation could affect 14 city contracts worth $4.7 million. The city hires private companies to maintain parks, municipal buildings and other facilities, and also has a multiyear maintenance agreement with a nonprofit organization that employs developmentally disabled workers.
"This measure violates the fundamental principle of local control and the constitutional limits of state authority over charter cities," Marsh wrote.
The Steinberg-Cannella legislation, which recently cleared the state Senate Committee on Labor and Industrial Relations, would make charter cities eligible for state funds only if they comply with the state's prevailing wage laws.
The bill's next stop: the state Senate Appropriations Committee.
"The bill punishes charter cities that exempt themselves from prevailing wage," said Dave Renison, president of San Joaquin Taxpayers Association. "Statewide concern should be for municipalities to save as much money as they can on construction projects in order that they might ease their massive unfunded pension liabilities and prevent themselves from entering into bankruptcy."
Bee staff writer Rosalio Ahumada and The Record of Stockton contributed to this report.