The City of Tempe is considering a prevailing wage ordinance, which could increase the costs of taxpayer-funded projects.
The ordinance would force public works projects that are $250,000 or more to pay workers a rate that matches other contractors in the area, which could mean a higher rate backed by unions. Since Arizona is a “right-to-work” state, this could lead to increased labor costs since many contractors do not employ union workers.
Tempe City Council will be holding a first public hearing on the possibility of an ordinance on Thursday, but groups are already voicing their opposition.
The Goldwater Institute wrote a letter to the council on behalf of the Arizona Builders Alliance and the Associated Minority Contractors of Arizona on Monday that said the ordinance could violate state law if approved.
“If the City adopts this ordinance and regulates matters that are expressly pre-empted by state law, it will expose the City to a high risk of litigation, as well as costs and attorneys’ fees for parties who successfully challenge the unlawful ordinance,” Goldwater Institute staff attorney John Thorpe said.
In a press release, Thorpe referenced the city of Phoenix’s decision to reverse a prevailing wage ordinance amid rising concerns about legal consequences last month.
“The city of Phoenix recently passed its own ‘prevailing wage’ law – a mandate similar to Tempe’s. But the city repealed the law less than a week after Goldwater pointed out that it was illegal and burdensome, and demanded the city council ditch it,” he said.
Phoenix City Manager Jeffrey Barton estimated the ordinance represented a $60-million cost in the current year alone.
The decision to consider a prevailing wage ordinance comes with the timing of an upcoming May 16 special election, in which Tempe voters are deciding whether to back a massive investment into a sports district centered around the Arizona Coyotes hockey team.
Republished with the permission of The Center Square.
