PHOENIX — The Arizona Court of Appeals has ruled that Tucson and Phoenix cannot require contractors on city-funded projects to pay a “prevailing wage,” concluding that such mandates are barred under state law.
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The unanimous three-judge panel determined that voter-approved measures allowing cities to set their own minimum wages do not override a 1984 ballot initiative that outlawed prevailing wage requirements in Arizona.
The decision means not only Tucson and Phoenix, but any Arizona city, cannot impose prevailing wage standards on companies performing municipal contracts.
At the center of the dispute was whether voter-approved minimum wage laws in 2006 and 2016 gave cities authority to go further and mandate prevailing wages for certain public contracts.
Those minimum wage measures established a statewide wage floor — now $15.15 per hour — and explicitly permitted cities to adopt higher local minimum wages. Tucson’s minimum wage currently stands at $15.45.
City officials argued that the authority to regulate wages locally included the power to require contractors on large city projects — those valued at $2 million or more — to pay wages comparable to similar workers in the same community.
But the appellate judges disagreed, pointing to the earlier 1984 ballot measure that ended Arizona’s prior prevailing wage law, which had mirrored the federal Davis–Bacon Act of 1931 requiring government contractors to meet local wage standards.
Writing for the court, Judge Michael Catlett said voters in 2006 and 2016 did not explicitly repeal the 1984 ban.
The minimum wage laws, he wrote, were intended to ensure that “all working Arizonans deserve to be paid a minimum wage that is sufficient to give them a fighting chance to provide for their families.”
He added that allowing cities to set higher minimum wages advances that purpose.
“But allowing local government to contractually require prevailing wages for certain employees performing certain work on certain projects does not,” Catlett wrote. He said prevailing wages benefit “only a subset of the city's citizens when they perform certain work on a subset of projects.”
Tucson Mayor Regina Romero previously defended the city’s ordinance.
"Workers are the foundation of our economy," she said in a prepared statement at the time.
"To me, a prevailing wage is important because it helps to stabilize families and protect construction workers who, by the way, are often victims of wage theft and classification," the mayor said. "It helps bring workers into the middle class and helps to reduce pay gaps for women, Black, immigrant and Latino workers."
The ordinances drew a lawsuit from contractor groups represented by the Goldwater Institute, who argued that minimum wage authority is not the same as prevailing wage authority.
They maintained that while cities can set a baseline wage applicable to all workers, they cannot require special wage standards tied specifically to government contracts.
Timothy Sandefur, an attorney with the Goldwater Institute, praised the ruling.
"The real winners in today's ruling are Arizona taxpayers," he said in a statement.
He warned that a contrary decision would have allowed cities to dictate wage terms for any employer contracting with municipal governments.
"That, of course, would cost taxpayers more — reducing their freedom of choice and their ability to invest in their own futures — all for the benefit of politicians and politically well-connected lobbyists," Sandefur said.
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The appellate ruling aligns with a 2024 decision by a Maricopa County Superior Court judge who concluded that prevailing wage regulations differ fundamentally from minimum wage statutes.
By clarifying that the 1984 ban remains in effect, the court has effectively closed the door — at least for now — on efforts by local governments to reinstate prevailing wage requirements through municipal ordinances.
There was no immediate indication whether Tucson would appeal the ruling to the Arizona Supreme Court.
For contractors and municipalities statewide, the decision provides clarity: while cities may set higher minimum wages for all workers within their jurisdiction, they cannot impose prevailing wage requirements tied specifically to public construction contracts without a change in state law or another vote of the people.
Originally reported by HOWARD FISCHER Capitol Media Services in EA Courier.
