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San Diego County Cities Battle State Over Prevailing Wage Law

Photo caption:

Photo by Promise Yee

Street-widening projects like this one in Oceanside would be affected by Senate Bill 7, which penalizes cities that don't pay prevailing wages.

Oceanside became a charter city in 2010, partly to gain the option of not paying higher prevailing wages on public projects. But recently, all of the contracts awarded by the city have been to companies that pay prevailing wages.

A number of cities in San Diego decided to become charter cities in recent years because they believed it could save millions of dollars if they were freed from state laws requiring them to pay prevailing wages on all their public projects.

Prevailing wages typically are what the prevalent pay is in a region. With taxpayer-funded projects, labor unions are usually hired and the prevailing wage is closer to higher union-scale pay.

To combat the attempt by charter cities to avoid paying the prevailing wage, California's Democratic-controlled Legislature last year passed Senate Bill 7, and Democratic Gov. Jerry Brown signed it into law.

Scheduled to take effect next year, the law would withhold state funds for such things as housing, roads, parks and libraries from cities that do not pay prevailing wages on all of their public projects.

Four San Diego County charter cities — Carlsbad, Oceanside, Vista and El Cajon — are part of a lawsuit challenging SB7. They have joined Fresno and El Centro in asking a San Diego Superior Court judge to declare the law unconstitutional.

James Lough, special counsel to El Centro, said the litigation is about the right of cities to self-governance.

"This case isn’t really about prevailing wage to us,” Lough said. “It’s about sovereignty under the constitution. Because if the Legislature could say OK, unless you agree to pay prevailing wage, then we’re not funding the project, you can’t apply for any projects. The next law down the pipe could be something else telling us that we’re cutting off state funding if we don’t like it."

Supporters of SB7 say it provides for livable wages and good jobs. General law cities have to pay prevailing wages on all of their public works projects.

If the six charter cities do not succeed in their lawsuit, they may have to scramble to get charter amendments on the ballot in time for the November election or risk forfeiting state funding.

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