.webp "Victor Riches, President and CEO of the Goldwater Institute")
The Arizona Court of Appeals has ruled against the implementation of prevailing wage ordinances in Phoenix and Tucson, siding with a challenge brought by the Goldwater Institute.
The decision is significant for taxpayers across Arizona, as it prevents cities from requiring contractors on public works projects to pay wages calculated through a prevailing wage formula. The ruling means that Arizonans will not be required to pay higher costs for government projects due to these ordinances. According to the Goldwater Institute, the court’s unanimous decision protects residents from inflated prices for public works projects statewide.
The Goldwater Institute’s lawsuit argued that efforts by Phoenix and Tucson to use a 2016 minimum wage initiative as justification for implementing prevailing wage requirements were invalid. The organization pointed out that a 1984 initiative had explicitly banned prevailing wage contracts in Arizona. The court agreed with this position, rejecting arguments from both cities that prevailing wages are a form of minimum wage.
Prevailing wages differ from minimum wages in how they are determined and applied. While minimum wages set a baseline rate all employers must pay, prevailing wages are calculated using an average of what other contractors in the region receive and apply only to companies with specific government contracts. These rates tend to be higher than standard minimum wages.
The ruling was described by the Goldwater Institute as a victory for taxpayers who “will not have to pay more for government projects than necessary.” More information about the case and access to the court’s opinion can be found on the Goldwater Institute website.
