State Attorney General Jennifer Granholm ruled on July 19 that charter schools are subject to the state's prevailing wage law, which mandates that government construction projects pay contractors according to higher union wages. The ruling could dramatically increase the costs of construction for charter schools.

Granholm's opinion came in response to a question from State Rep. Michael Hanley. Granholm said that since charter schools receive public money, they are subject to the Prevailing Wage Act.

Charter schools must now seek bids for all construction or renovation costs exceeding $12,500.

In 1999, State Rep. Wayne Kuipers introduced a bill to repeal the prevailing wage law, which he said adds an estimated 10 percent to the final cost of construction projects.

James Kos, superintendent of Hamilton Public Schools, thinks the prevailing wage law should be repealed for all schools. Hamilton is in the process of building multiple facilities costing about $36 million.

"If the prevailing wage act had not been in effect, we'd have been able to save a significant amount of money," Kos told MER. Original projections estimated a savings between one and $1.5 million in construction costs. "That's money we could have used for students."

Associated Builders and Contractors, a nonunion builders organization, is currently suing the state to get the law declared unconstitutional.