The Ehrlich administration is shutting down the offices that enforce minimum wage and prevailing wage laws, ignoring legislation passed by the General Assembly this year directing the governor to keep them open.
Legislative leaders and union officials called the Ehrlich administration's move a backdoor attempt to repeal the prevailing wage statute and a violation of the governor's duty to follow and enforce laws passed by the Assembly.
"It's outrageous. It's an insult. It's a slap in the face to every working man and woman in Maryland," said Senate President Thomas V. Mike Miller, a Democrat. "The constitution says the General Assembly makes the laws. We make the laws and, for whatever reason, this governor chooses to ignore them."
Gov. Robert L. Ehrlich Jr., a Republican, did not inform legislative leaders that he would be discontinuing the two offices, and his administration made no announcement about them. But the telephone line for the Employment Standards Office, which investigates unpaid-wage and child-labor complaints, is now answered by a recording that says the agency was a victim of state budget cuts and will no longer have staff to assist workers. The same message is posted on the office's Web page.
Administration officials confirmed yesterday that the Prevailing Wage Office, which upholds wage laws for state-funded public works projects, also will cease to exist July 1.
Ehrlich's chief of staff, James C. "Chip" DiPaula Jr., said the Department of Labor, Licensing and Regulation is required to enforce the wage laws and will do so without those offices. He said the legislature overstepped its constitutional bounds by trying to require the governor to fund them for the coming fiscal year.
Maryland Attorney General J. Joseph Curran Jr., a Democrat, wrote Ehrlich in March, saying he believed that the provision requiring the department to maintain the wage offices met constitutional requirements - but he acknowledged that the language was questionable.
"Reasonable arguments can be made to both support or challenge these types of action," Curran wrote.
If legislators continue inserting such provisions in budget bills, he added, "they may invite a serious constitutional challenge."
Maryland's Constitution allows the legislature to cut from the governor's budget proposal, not to increase it or transfer funds from one program to another. The Ehrlich administration argues that the budget language the legislature passed would require the labor department to spend money not in the governor's budget and is therefore not binding.
Legislators attempted to account for the spending their language would require by cutting money from another part of the department's budget - subsidies for horse racing purses - and stipulating that the funds could be spent only on the wage offices.
"The administration has concerns that certain boundaries are being crossed by the legislature," said Ehrlich spokeswoman Shareese DeLeaver.
The situation echoes a dispute last year when the Assembly passed budget language prohibiting the Ehrlich administration from raising health care costs for state employees without union approval.
While lawmakers were debating that provision, the administration got an opinion from Curran's office saying that such a restriction would not be binding because it would exceed the legislature's budgeting authority.
Administration officials did not reveal the existence of the opinion until months later, when they approved new health care contracts that would have increased employee co-payments and emergency room fees.
The Ehrlich administration eventually agreed to negotiate with employee unions but did not concede the point about whether such budget language is binding.
Dan Friedman, a Baltimore attorney who has taught state constitutional law at the University of Maryland and is writing a book about Maryland's Constitution, said such disputes have been common over the years.
"The budget is right at the intersection of legislative and executive power," Friedman said. "It's been a continual process of renegotiating that boundary."
Friedman said that without studying the legislation he could not say definitively whether the legislature or the governor is right. But he pointed to a 1978 amendment that reads, in part, that the governor may not reduce a program's budget "below a level of funding prescribed by a law ... which was enacted before July 1 of the fiscal year prior thereto."
That means that to require spending in fiscal year 2006, which begins July 1, the legislature would have had to pass a law before July 1, 2004. The legislation in dispute was enacted this year.
The legislature also included budget language requiring the governor to fund the offices in fiscal 2007. DiPaula did not dispute the legislature's right to require spending in future years.
Connie DeJuliis, a lobbyist for the Baltimore Building Trades Council, said that if the offices close for a year, workers would have no recourse other than to hire an attorney and go to court to settle wage disputes. The offices did not have enough resources to do their jobs to begin with, but if they are eliminated, there's no way the labor department can truly enforce the laws, she said.
The two offices that Ehrlich eliminated enforce several wage provisions, but the one that unions expressed most concern about requires contractors doing business with the state to pay the prevailing wage - in effect, the union rate.
DeLeaver said Labor Secretary James D. Fielder Jr. decided to eliminate the offices as he prioritized his agency's operations as part of a government-wide "strategic budgeting" initiative. The offices' combined budget is about $700,000 a year. The Department of Labor, Licensing and Regulation's general fund budget is about $18 million.
The offices also enforce the minimum wage and help workers collect back pay owed by employers. They collected nearly $1 million in wages owed to employees in 2003.
"That's a lot of money that was, in fact, collected and disbursed to people," said Ron Bailey, executive director of the American Federation of State, County and Municipal Employees Council 92. "This [governor] appears to think that he lives by his own law and feels he can pretty much do whatever he wants to."
Immigrant activists have also protested Ehrlich's effort to close the wage offices, saying those new to the country frequently have difficulty collecting their pay. But Michael Henderson, president of the Baltimore-area chapter of Associated Building Contractors, praised Ehrlich's decision to shut down the prevailing wage office.
Skilled construction workers are in demand, he said, and they don't need the wage protections afforded by the law. But because of the unions' influence in the legislature, the governor could never succeed in getting the law repealed, he said.
Not enforcing the law is the next best thing, Henderson said.
"When we first heard about it, it was, 'Wow.' It really took us by surprise. It was brilliant," Henderson said. "If he's able to do this, the state is going to get a lot more bang for its construction dollar and without hurting construction workers in the slightest."
Fred D. Mason, president of the Maryland/D.C. council of the AFL-CIO, disputed the notion that prevailing wage laws cost the government more money. Economic studies have shown no significant difference in the final cost of projects in states with such laws, he said.
"By addressing the issue of wage standards, you make sure you get qualified people to do the work," Mason said.
House Speaker Michael E. Busch said Ehrlich has a constitutional duty to enforce Maryland's laws whether he likes them or not.
"They are the laws of the state, and it's the responsibility of the executive to enforce them," Busch said. "He can't pick or choose, just like citizens can't pick or choose which laws to obey."