Annapolis -- When Bausum & Duckett Electric Inc. won a bid to work on the Crownsville State Hospital last year, a state law required the electrical contractor to pay its workers an average of $22 an hour, $9 more than the company normally pays its non-union workers.

If not for the so-called "prevailing wage" law, which sets what often amounts to a minimum wage for state construction projects, "the state would've saved $230,000 just on the electric part of the job," said Robert W. Procter, president of the Edgewater electrical contractor.

Multiplying that example by hundreds of state projects -- highways and buildings, large and small -- non-union building contractors figure the law adds up to $50 million a year to state construction costs.

The culprit, the contractors say, is a 46-year-old Maryland law that requires contractors on state projects to pay workers the prevailing wage in the county in which the work takes place. With lawmakers searching for savings under every stone in a sort of budgetary Easter egg hunt, the perennial attack on the prevailing wage law has become intense. Usually Republican lawmakers lead the charge, but lately even some Democrats have taken an interest.

"I'd be willing to take some sort of modification, if not repeal" of the law, says Sen. Charles H. Smelser, D-Carroll, the chairman of the Senate's capital budget subcommittee.

Some are floating the idea of limiting the types of project to which the law applies, or changing some of its cumbersome work regulations.

"I think the governor would be very interested in working with legislators to see if there should be changes made to the prevailing wage law," says David Iannucci, chief legislative officer to Gov. William Donald Schaefer. He adds that Mr. Schaefer has no bill pending and isn't likely to sponsor one.

Building contractors acknowledge that it's still an uphill fight but say they are encouraged. "The chances are better now" for repeal or modification of the law, says Harvey Epstein, the lobbyist for the mostly non-union Associated Builders and Contractors (ABC).

That's because of "the enormity of the [budget] crisis we're in, the depths of it, the possibility that repeal or modification [of prevailing wage] could become part of a total package of reduction in expenditures and the manner in which the state operates," Mr. Epstein said.

Contractors argue that, for a variety of reasons, the prevailing wage usually ends up being the much-higher union wage. The law is nothing but a union protection act, non-union contractors complain.

Construction unions argue that the prevailing wage is not the union wage, and far from costing the state money, it's good for Maryland's economy. It helps larger, more reliable firms, who tend to pay higher wages, compete with smaller firms in a procurement process that favors the lowest bidder, they say. And it discourages builders from importing low-paid workers from depressed areas of the country.

"You want to have workers coming in from out of state, willing to live out of a trailer?" asked William J. Smith Jr., a representative of the International Union of Operating Engineers, Local 37. "That's not helping Maryland's economy."

For years, Mr. Smith and his colleagues have fought successfully in Annapolis to preserve the prevailing wage law. But this year they perceived enough of a threat to muster about 500 troops for a General Assembly opening-day rally, where hard-hatted protesters chanted, "Keep prevailing wage!"

Maryland, which first enacted an embryonic prevailing wage law in 1945, determines the wage for every type of construction worker by sending out voluntary wage surveys each year to contractors in every county.

The law was expanded in 1969 just before then-Gov. Marvin Mandel's mammoth school building program was launched. It now applies to projects valued at or above $500,000 for which funding from the state is at least 50 percent, or at least 75 percent on public school projects.

Union participation

The prevailing wage is defined as the rate, including fringe benefits, paid to 50 percent or more of the employees for each job classification in a county. If less than half the workers earn one rate, then the state uses 40 percent; and if less than 40 percent earn the wage, a weighted average is taken.

Non-union contractors argue that most of the state-set wages are union wages, or very close, because it is primarily the unions who take the trouble to fill out the forms.

"One of the big problems is that there is probably not one open-shop contractor out of 50 that will participate in this," says Stanley Ferguson, president of Annapolis-based Ferguson Trenching Co.

Also, he says, a non-union contractor may pay slightly different wages to each person in a job classification, whereas the union rates apply uniformly to every worker. That helps give the unions more influence in the wage surveys, he says.

A 1989 state Department of Fiscal Services study seems to bear him out. It showed that "Maryland's prevailing wage law has increased the cost of state buildings by between 5 and 15 percent, at least in metropolitan and other high-wage areas."

The cost differences are much lower for highway work, the report said, because of the lower level of skill required for most road construction.

The contractors also oppose the law's accompanying regulations, such as submitting weekly pay sheets for state projects; restrictions on the number of helpers and apprentices on a site; and the required overtime pay after an eight-hour day, rather than after a 40-hour week, as federal law allows.

"If you get a rainy day that you can't work," Mr. Ferguson says, "then you can't make up that time [with a longer day later in the week] because you can't afford to pay the overtime."

He says those problems, and the hassles caused by paying different wages to the same people for different types of projects, makes it almost not worth bidding for the public projects.

"Beat you over the head"

For Steven Himmelheber, an electrician who until recently was non-union, the public project "was the only thing we had to look forward to." His union wage, which coincides with the prevailing wage in Baltimore, is $25 an hour, compared to the $15 an hour he used to earn.

"Without the wage being set," he says, "the contractor would beat you over the head." Many times Mr. Himmelheber saw non-union contractors ignore the law by paying workers less than prevailing wages and keeping the difference.

"Sometimes they get burned by the labor board [which imposes fines], and sometimes they put it in their pocket," he says. Without the law, "I think the contractors will put in the same bid; they'll just put the difference in their pocket."

Mr. Smith of the operating engineers union says equating prevailing wages with union wages is simply nonsense. In fact, the state Division of Labor and Industry reports that only 26 percent of all the official prevailing wage classifications in Maryland coincide with the union rate.

In at least one jurisdiction -- Washington County -- some prevailing wages actually are higher than the union rates, according to Mr. Smith.

Besides, the wages are just the direct costs, and supporters of prevailing wage say their foes ignore the long-term savings. A comparison of highway work done in California and Florida, for instance, showed that projects where workers were paid an average of $9.56 an hour ended up costing the respective state 50 percent more in total labor charges than projects where employees earned $29.34 an hour. That's because the higher-paid workers were far more productive, the study indicates.

The Department of Fiscal Services report said that "prevailing wage policies may have an indirect influence on quality by enabling larger construction firms to compete more effectively for state building projects." The law puts the large firms on the same field as small contractors, who otherwise would be able to lower their bids on the backs of their low-paid -- and often less trained -- workers, the unions argue.

Union officials liken the prevailing wage law to a construction industry minimum wage statute. As for the argument that government has no business being involved in such private transactions, they point to the sanctions imposed, however seldom, against doctors and lawyers who charge too much.

State laws

States that have enacted prevailing wage laws, the date the law was enacted and, if applicable, the date the law was repealed.

-#.. .. .. .. .. .Date.. .. .. Date

State.. .. ..enacted.. ..repealed

Alabama.. .. .. 1969.. .. .. 1981

Alaska.. .. .. .1931.. .. .. .. ..

Arizona.. .. .. 1912.. .. .. .. ..

Arkansas.. .. ..1955.. .. .. .. ..

California.. .. 1931.. .. .. .. ..

Colorado.. .. ..1933.. .. .. 1985

Connecticut.. ..1935.. .. .. .. ..

Delaware.. .. ..1962.. .. .. .. ..

D.C. .. .. .. ..1931.. .. .. .. ..

Florida.. .. .. 1933.. .. .. 1979

Hawaii.. .. .. .1955.. .. .. .. ..

Idaho.. .. .. ..1911.. .. .. 1985

Illinois.. .. ..1931.. .. .. .. ..

Indiana.. .. .. 1935.. .. .. .. ..

Kansas.. .. .. .1891.. .. .. 1987

Kentucky.. .. ..1982.. .. .. .. ..

Louisiana.. .. .1968.. .. .. 1988

Maine.. .. .. ..1933.. .. .. .. ..

Maryland.. .. ..1945.. .. .. .. ..

Mass. .. .. .. .1914.. .. .. .. ..

Michigan.. .. ..1965.. .. .. .. ..

Minnesota.. .. .1973.. .. .. .. ..

Missouri.. .. ..1957.. .. .. .. ..

Montana.. .. .. 1931.. .. .. .. ..

Nebraska.. .. ..1923.. .. .. .. ..

Nevada.. .. .. .1937.. .. .. .. ..

.. .. .. ..1941.. .. .. 1985

New Jersey.. .. 1913.. .. .. .. ..

New Mexico.. .. 1937.. .. .. .. ..

New York.. .. ..1897.. .. .. .. ..

Ohio.. .. .. .. 1931.. .. .. .. ..

Oklahoma.. .. ..1965.. .. .. .. ..

Oregon.. .. .. .1959.. .. .. .. ..

Pennsylvania.. .1961.. .. .. .. ..

Rhode Island.. .1935.. .. .. .. ..

Tennessee.. .. .1953.. .. .. .. ..

Texas.. .. .. ..1933.. .. .. .. ..

Utah.. .. .. .. 1933.. .. .. 1981

Washington.. .. 1945.. .. .. .. ..

West Virginia.. 1933.. .. .. .. ..

Wisconsin.. .. .1931.. .. .. .. ..

Wyoming.. .. .. 1967.. .. .. .. ..

States that have never enacted a prevailing wage law:

Georgia

Iowa

Mississippi

North Carolina

North Dakota

South Carolina

South Dakota

Vermont

Virginia