PHX Reporter

Phoenix District 1 Councilwoman Ann O'Brien is a vocal opponent of the City of Phoenix's “prevailing wage” ordinance, noting that the ordinance violates state law.

O’Brien was one of three council members to vote against the ordinance, which applies exclusively to construction projects exceeding $4 million, imposes stringent regulations on businesses vying for public-works projects.

It introduces intricate federal formulas, record-keeping obligations and weekly paperwork submissions, with substantial fines for even minor violations.

“I voted against the prevailing wage ordinance because I believe it violates state law,” O’Brien told PHX Reporter.

“ARS 34-321 limits a political subdivision of the state, in this case the City, from requiring a prevailing wage on public works projects. Even though the Attorney General opined that a prevailing wage is a type of minimum wage, and therefore granting the authority to set a prevailing wage, her opinion does not set legal precedent. As expected, the City has been sued and it will be up for a judge to determine the legality of the most recent ordinance.”

The prevailing wage ordinance allegedly violates both state law and the Arizona Constitution. An earlier version of the ordinance was overturned after a previous legal challenge.

The passage of the ordinance in early January has reignited legal tensions, and the Goldwater Institute has filed a lawsuit against the City of Phoenix, challenging its adoption of the "prevailing wage" ordinance.

The Goldwater Institute, representing industry associations, filed the lawsuit seeking injunctive relief to invalidate the ordinance.

The lawsuit, filed on behalf of industry associations, seeks injunctive relief to invalidate it.

The Goldwater Institute contends that prevailing wage regulations increase costs for taxpayers, hinder small businesses, and impede job opportunities, citing negative effects on businesses and employees from decades of research.

The City Council voted 6-3 in favor of the prevailing wage ordinance. Proponents estimate an annual cost of $17 million to the city's infrastructure budget, along with the creation of 12 new positions costing $1.4 million annually.

The ordinance excludes projects related to the city's 2023 General Obligation bond, differentiating it from a previously repealed ordinance.

Mayor Kate Gallego, who voted in favor of the ordinance despite concerns over legality, cited Attorney General Kris Mayes' opinion supporting the prevailing wage's legality.