EDITORIAL: Steinberg's SB 7 would tie charter cities' hands

Senate Bill 7, authored by Senate President Pro Tem Darrell Steinberg and sponsored by his union allies, challenges the independence of charter cities such as Fresno in ways that are heavy-handed and unfair.

The bill would deny state construction funding -- including state bond money, loans or grants -- to any city whose voters have approved charter provisions that exempt contractors from paying prevailing wages for locally funded projects.

The bill seeks to blunt the impact of a California Supreme Court decision last year in State Building and Construction Trades Council of California, AFL-CIO v. City of Vista et al. In that case, the justices ruled 5-2 that when a charter city is using purely local funds for municipal projects such as a firehouse or street repairs, the city is not bound by the state's prevailing wage laws.

Of California's 120 charter cities, 51 have provisions that exempt them either partially or completely from state prevailing wage requirements when they use their own money for city construction projects.

Under the law, those 51 cities cannot avoid usually higher union wage rates if they use any state funds to build their public works. And, that's fair. The state gets to make the rules when it's paying the bills.

But the legislation by Steinberg seeks to punish charter cities for exercising their right to spend their own money in ways they decide is best. Fresno Mayor Ashley Swearengin is among many mayors opposed to SB 7. In a letter to Steinberg, she spelled out her objections.

"While the city of Fresno has established policy to require the payment of prevailing wages for city funded projects," Swearengin wrote, "we have grave concerns that this legislative tactic is used to disallow us flexibility and will be used in the future to erode other local flexibility that is important to our community.

"This measure would establish a disturbing framework for future state micromanaging of charter city laws and policies by the tactic of withholding state funds as political leverage to attempt to force changes to city charters and ordinances."

While the independence of charter cities is under attack specifically in this bill, the prevailing wage rate issue touches all jurisdictions. The Department of Industrial Relations sets prevailing wage rates based on the most frequently occurring rate in a region. That methodology, unique to California, means that the prevailing rate will be the union rate and almost always the highest rate paid. But union rates don't reflect the reality of most local labor markets. They can inflate construction costs wildly, particularly in the economically depressed San Joaquin Valley.

It's unlikely that labor-friendly Democratic legislators will defeat Steinberg's bill. If SB 7 reaches Gov. Jerry Brown's desk, the governor, who has championed local control, should veto it. Beyond that, he should do something about how his Department of Industrial Relations calculates prevailing wage rates.