Goldwater Institute Pressure Prompts Phoenix To Repeal Prevailing Wage Ordinance

April 24, 2023

By Daniel Stefanski |

Just days after a powerful Arizona government watchdog group threatened possible legal action, the City of Phoenix repealed a controversial ordinance that had passed the previous month.

On Wednesday, the Phoenix City Council voted to repeal the prevailing wage ordinance, 6-3, after a change of two councilmembers. Councilmembers Kesha Hodge Washington, Jim Waring, Ann O’Brien, Kevin Robinson, Debra Stark, and Mayor Kate Gallego voted for the repeal; while Councilmembers Yassamin Ansari, Laura Pastor, and Betty Guardado voted to maintain the ordinance.

After the vote, Mayor Gallego took to Twitter to explain her decision, writing, “Workers deserve a living wage – and we can deliver that through a robust, public process that doesn’t put the city in legal and financial jeopardy. That’s why I voted with a majority of Council to direct city staff to find legally viable ways to increase wages on city projects. I believe in doing things the right way, not the fast way, and that’s what we decided to do today. I am optimistic that we will find a path forward for better pay for construction workers while, at the same time, put sound policy on the books that survives legal challenges.”

The Goldwater Institute, which had sent a letter to the Council earlier in the month, championed the news out of Phoenix. John Thorpe, a staff attorney with Goldwater, stated, “Yesterday’s repeal is good news for businesses, their employees, and all taxpayers – and it’s a reminder that Goldwater will never stop fighting to hold government accountable and to defend Americans’ economic freedom from burdensome, counterproductive regulations.”

Thorpe wrote that the ‘Prevailing Wage Ordinance for City Projects’ law, “introduced on short notice with almost no chance for public scrutiny from anyone it would impact, required businesses that contract with the city for construction projects costing more than $250,000 to follow a slew of new requirements: they would have had to provide their employees with wages and benefits based on complicated formulas produced by the federal government, keep painstaking records, and comply with a host of other rules and regulations. Worse still, all these regulations came with the risk of heavy fines and potentially crippling lawsuits, even for minor infractions.”

On March 21, three Phoenix City Councilmembers – Carlos Garcia, Betty Guardado, and Laura Pastor, sent a letter to City Manager Jeff Barton, requesting a Special Meeting the following day to consider the Prevailing Wage Ordinance for City Projects. The three councilmembers wrote, “We believe it is time for leadership to address the lack of skilled construction workers needed to fill the rising demand for labor in Phoenix. We know that areas of the country with prevailing wages for city projects have a greater supply of apprentices and pathways for young people to find and join a skilled trade. A prevailing wage ordinance for city projects will ensure that our development growth is matched with the skilled labor we urgently need when we invest in the growth of our communities.”

The next day, the Ordinance was approved by a vote of 5-4. Councilmembers Garcia, Guardado, Pastor, Sal DiCiccio, and Yassamin Ansari voted in favor of the Ordinance. Garcia and DiCiccio have since left the Phoenix City Council, being replaced by Kevin Robinson and Kesha Hodge Washington.

On April 13, the Goldwater Institute, representing the Arizona Builders Alliance and the Associated Minority Contractors of Arizona, sent a letter to the Phoenix City Council to “express serious concerns” about the Ordinance passed on March 22. Thorpe, writing again for Goldwater, informed the City that if “the enacted version of the ordinance regulates matters that are expressly pre-empted by state law, it exposes the City to a high risk of litigation.” Thorpe outlined that “when the Legislature enacts a law on a matter of statewide concern, that law pre-empts and overrides any conflicting municipal provision. In this instance, voter-approved state law dating back to 1984 expressly provides that ‘prevailing wage’ requirements for public works contractors are a matter of statewide concern and may not be imposed by municipalities.”

Thorpe also found “it troubling that this ordinance was enacted after providing the public barely twenty-four hours’ notice and without any meaningful input from the many stakeholders it will affect.” He also pointed out that “the final version (of the ordinance) enacted by the Council has not yet been made publicly available,” which he questioned the existence of “any legal authority the City possesses to withhold a duly enacted ordinance from public inspection.”

Democrat Senator Catherine Miranda also waded into the discussion on the City of Phoenix’s action in March, submitting a 1487 request to Arizona Attorney General Kris Mayes on April 17, to “clarify the apparent conflict between two statutes and consequently determine whether Phoenix has the authority to enact prevailing wage at the municipal level.”

Before the new coalition voted to repeal the Prevailing Wage Ordinance, another Democrat Senator, Anna Hernandez, voiced her disapproval with Mayor Gallego’s pending action, tweeting, “(Mayor Gallego) is once again turning her back on our union brothers and sisters.” Hernandez also shared an excerpt from a questionnaire that Gallego filled out during her mayoral run, where she wrote, “At the end of the day, prevailing wage laws are good for working families in the city of Phoenix and I will do what I can to support the enforcement of federal prevailing wage law, and advocate for a reintroduction of Arizona’s state or city prevailing wage law.”

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.

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