A surprise ruling that reversed a decades-long practice governing wages for highway work could increase the cost of road projects by $200 million statewide this year.

That means hundreds of miles of planned municipal street and state highway projects might have to be scrapped in order to cover higher wages and comply with the Pennsylvania Department of Labor and Industry's directive.

The issue is triggering "road rage" of a different nature.

"Outrageous and devastating to municipalities," state Sen. Jake Corman, R-Centre County, said of the ruling that moves resurfacing and other work from a "maintenance" classification that's exempt from the prevailing wage law to a "construction" classification that isn't exempt, reflecting higher, union-scale pay rates.

Mr. Corman has sent a letter demanding an explanation from Labor and Industry Secretary Stephen M. Schmerin, saying he should transfer funds from his budget to local government "to pay for this folly."

Several officials said the matter smacks of politics, namely the gubernatorial election.

Nobody was more vocal than Jack Zimmer, president of the Harrisburg-based Associated Builders and Contractors Inc., a 1,700-member trade association that represents many independent contractors.

"It's all part of [Gov.] Ed Rendell's secret plan to advance the union agenda and win their support," he said. "It's a shame. It's a big problem."

Higher wages and administrative compliance can add up to 30 percent to project costs, people in the highway business estimated.

The requirements come on top of a 30 percent increase in asphalt and energy prices, already stretching scant dollars to maintain 77,000 miles of municipally owned streets and 40,000 miles of state-owned highways.

The issue never arose at a Pennsylvania Department of Transportation quarterly meeting with its Municipal Advisory Committee two weeks ago, although it has been in the works for months, said Ed Troxell, director of government affairs for the Pennsylvania State Association of Boroughs. "It was just sprung on everyone. It reeks of politics."

The organization has sent an "alert" to boroughs, explaining details and asking how much the new interpretation of the prevailing wage law will impact their budgets and road improvement plans.

Asked whether $200 million was a reasonable estimate of the cost impact statewide, "Gosh, yes," Mr. Troxell said.

PennDOT has withdrawn bids on a dozen projects, and many municipalities have done or are in the process of doing the same, since the prevailing wage provision must now be made a part of contracts bid by any qualified highway construction company, union or non-union.

PennDOT spokesman Rich Kirkpatrick said the department is still analyzing the impact on its road program.

Barry Ciccocioppo, spokesman for the state Department of Labor & Industry, said Mr. Rendell had nothing to do with the matter and that it has been under study for about a year, following complaints that he said came from individuals in Mercer, Centre and Chester counties.

"When we get a complaint, we investigate," he said. "That's when we found that the [prevailing wage] exemption had gone well beyond the meaning of the law. When we did a further investigation, we advised PennDOT that the law should be applied as it was written" and as was generally practiced until about a decade ago.

Municipalities are included because they receive a portion of gas taxes (called the Liquid Fuels Allocation), which are used mostly to maintain, repair and repave local streets or repair small bridges, often in combination with money out of their general fund.

This year, PennDOT is to dole out more than $320 million in liquid fuels funds to township, borough, city and county jurisdictions.

Elam Herr, assistant executive director of the Pennsylvania Township Supervisors Association, called the prevailing wage requirement "a big surprise" that the organization learned about through a vendor.

"We need an influx of new money, and now they throw this at us," he said.

Robert Latham, executive vice president of the Associated Pennsylvania Contractors, which represents both union and non-union firms involved in heavy highway construction, compared the ruling to a minimum wage issue.

"When you raise labor costs, you reduce the amount of work you can put out," he said.

In Pennsylvania, that's expected to be more than $1.5 billion this year, including municipalities, although the major PennDOT projects are typically bid by big companies who utilize union labor.

In Allegheny County, these are samples of the most recent prevailing hourly wage rates (not including the cost of fringe benefits) for highway and related work: carpenter, $25.87; equipment operator, $23.98; class 3 laborer, $21.95; ironworker, $27.68; cement finisher, $23.95; truck driver, $22.32.

Mr. Zimmer said its member firms pay an "occupational wage" typically about 15 to 20 percent lower than union-scale wages.

Mr. Corman was livid in his letter to Mr. Schmerin, charging him with using department regulations and policy guidelines "to enrich unionized labor at the expense of Pennsylvania taxpayers."

He listed concerns that included giving short notice of a change after road-repair programs have begun, complications with bid documents, failure to gather input from municipal governments, and "lastly, effectively reducing the funds available for road maintenance."