House General & Housing panel debates applying prevailing-wage rules to treasurer's housing loan program

The House Committee on General & Housing heard testimony April 7 about whether Vermont's prevailing-wage statute should apply to housing projects that receive treasurer-backed financing outside the capital construction appropriation.

David Nickenberg, representing Working Vermont and the Vermont Building and Construction Trades Council, told the committee that a labor provision had been removed from the senate markup and described a voluntary density bonus that would have awarded a 20% bonus for projects over 45 units using project labor agreements. "We don't see prevailing wage rates as a barrier to doing any of this stuff," Nickenberg said, adding that prevailing-wage standards can help workforce shortages and improve productivity and safety.

The witnesses also flagged a treasurer's proposal to expand a lending fund currently described in testimony as about $30 million (the transcript referenced the treasurer's "10% for Vermont" idea). Nickenberg said that when state dollars flow to construction outside the capital bill, the committee should consider whether the same labor standards that apply to capital-appropriated projects should follow.

Committee members pressed witnesses on practical implications. One member noted that Vermont's prevailing-wage law currently applies to projects with certain thresholds (a $100,000 threshold was cited and a higher threshold when half the money is state-provided). Members questioned whether lending or revolving funds that are later repaid should be treated the same as appropriated capital spending. "If it's state dollars, it's flowing too," Nickenberg said, while other members warned that treasurer-backed loans often make up only a small percentage of a project's capital stack and that applying prevailing wage to an entire project on that basis could alter project feasibility.

Lawmakers also asked for concrete cost information. Witnesses estimated labor represents roughly 25—30% of a construction project's cost and disputed the idea that prevailing-wage rules automatically inflate overall project costs. Nickenberg cited research from the Cornell School of Industrial and Labor Relations arguing that strong prevailing-wage policies help retain local workers, boost training and productivity, reduce injury rates and lower demand for public benefits such as SNAP and Medicaid.

Opponents at the hearing, including a committee member who said "this is not something I support," urged caution. They argued that tying prevailing wage to programs intended to expand housing finance or support smaller developers, manufactured-housing projects or homeownership could increase costs for projects serving households at lower AMI ranges and make it harder to build needed units. Committee members also asked whether Davis-Bacon–style rules apply only to on-site construction and whether off-site, factory-built homes funded through a treasurer program would be captured.

Members requested follow-up: fiscal analyses, comparative rate sheets for neighboring states, and written studies to show how prevailing-wage rules affect project pricing, profit margins and the share of costs attributable to labor versus other regulatory or design requirements. Witnesses said they would provide supporting studies and rate data. The treasurer's office had been consulted informally but committee members asked for explicit treasurer testimony and further discussion in a subsequent meeting.

The committee did not take any vote. Members closed the session after scheduling follow-up work and requested additional materials from witnesses and staff. The committee adjourned with a follow-up slot scheduled for 09:15 the next day.