The bill that would have penalized cities like Flagstaff and Tucson for minimum wages higher than the state mandate has failed.
Senate Bill 1108, which was sponsored by Republican Sen. Wendy Rogers of Flagstaff, would have given businesses in those cities a tax credit equal to the difference between the local and the state minimum wages.
Flagstaff’s minimum wage is set at $16.80 an hour, which is $2.95 more than the state minimum.
The bill was sponsored by local chambers of commerce and small businesses, who argue the higher minimum wages increased costs. Some lawmakers say they drove up inflation.
However, Democrats opposed the measure, saying the bill would punish cities for what their voters approved.
The bill was rejected in the House Ways and Means Committee, but it could still be revived.