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Arizona’s two largest cities this week adopted prevailing wage ordinances that a business community coalition says likely “violates state statute” and that will “have a chilling effect and create undue burdens on business.”
Phoenix adopted its ordinance 6-3, while Tucson passed its version unanimously.
Rather than allowing contractors to negotiate agreements with workers to determine what a job will pay, prevailing wage laws require contractors on city projects to meet standards determined by the U.S. Department of Labor based on the typical payment for different worker groups in the region.
In a letter to Phoenix Mayor Kate Gallego, several business associations including the Arizona Chamber of Commerce & Industry, the Arizona chapter of the commercial real estate group NAIOP, the Arizona Lodging & Tourism Association, and several others wrote that “State statute clearly outlines that prevailing wage ordinances are prohibited and risking city funds in a costly legal battle in defense of an ordinance that is unlikely to succeed is not the best use of limited taxpayer resources.”
A similar coalition sent a letter to Tucson Mayor Regina Romero opposing that city’s ordinance.
The Arizona chapter of the Associated General Contractors, which also signed the business community letters, said it is ready to pursue legal action.
“On day one of any ordinances’ effective date or sooner of appropriate, AZAGC will partner with companies and industry associations to challenge the legality of such exclusive practices,” AZAGC President David Martin said. “Instead of battling these issues at the council level, we’ll take our arguments through the court system.”
Arizona Chamber Vice President of Government Affairs Courtney Coolidge said prevailing wage ordinances make construction projects more expensive and force taxpayers to shoulder a higher cost burden.
“These schemes cut out any market competition and stick citizens with the bill,” Coolidge said. “We should let contractors compete for business and work out the best deal possible, not tie them up in red tape and drive up their costs, especially during a period of high inflation.”
The Phoenix City Council last year passed a prevailing wage ordinance, but it was opposed by Gallego, as well as the business community. After newly elected members joined the council, the measure was reversed. Phoenix’s rollback prompted Tempe to shelve its own planned ordinance.
Following Phoenix and Tucson’s recent actions, however, more cities could pursue their own ordinances, which business advocates say they’ll strongly oppose.
“State law is clear that prevailing wage policies cannot be imposed by cities,” Coolidge said. “Any city that attempts to ignore state law is inviting a lawsuit.”
Photo courtesy Azwatchdog, CC BY-SA 3.0 via Wikimedia Commons
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