Auburn City Councilman William W. Kirby doesn't believe local governments should have to pay more for labor costs on local public works projects than private businesses pay for their own projects.

That was a central argument last summer in a bid to approve a city charter in Auburn. The charter would have exempted the city from adhering to the state's prevailing wage law for locally funded projects.

The charter bid failed at the ballot box last month after vigorous opposition from organized labor working in the heavy construction industry.

"It's too bad that the charter city lost in Auburn, because I think the citizens misunderstood it," Kirby said.

"Why should municipalities, federal and state governments pay more for labor than normal businesses?" he said. "The taxpayer is getting screwed."

Last week, the state Supreme Court gave dozens of charter cities a psychological boost when it affirmed the ability of a Southern California city – Vista – to exempt itself from the state wage law.

The majority opinion authored by Associate Justice Joyce L. Kennard found that locally funded projects are municipal affairs and, therefore, there was no need for the state to interfere in Vista's local governance.

Four justices concurred. Two others filed dissenting opinions.

Prevailing wages are set by the director of the state Department of Industrial Relations.

The State Building and Construction Trades Council of California, which brought the case against Vista, argued unsuccessfully that such wages play a vital role in the economic health of a region and the state.

Sandy Harrison, spokesman for the building trades council, called the high court decision disappointing.

"We had hoped that the court would understand that the downward pressure on wages in an entire region resulting from cities' exempting themselves from the prevailing wage is very much a matter of statewide concern," said Harrison.

The issue won't disappear from the political landscape.

Kevin Dayton, head of the Roseville-based consulting firm Labor Issues Solutions LLC, has predicted a new wave of charter bids from cities that had been waiting for the court decision.

On the flip side, labor groups promise they won't give up on the issue.

"We will continue our fight for decent wages and benefits for construction workers throughout the state," said Harrison. "We'll keep making our case that cities harm themselves and lower their residents' standard of living when they drive down workers' wages, by depressing their regional economies."

Harrison said the opposition to the prevailing wage law "is part of a larger effort by the super-rich ruling class to fatten their own wallets by forcing everyone else to sacrifice. We will continue to fight it at every turn."

California has 361 "general law" cities, meaning that they must follow the general laws of the state.

The other 121 cities have charters. Of those, nearly 50 provide either partial or full exemption from the prevailing wage.

Folsom is a charter city, but it pays prevailing wage in all public works projects.

When a proposal came before the City Council in December 2010 to enable exemption from the wage law, the issue failed for lack of a second.

In 2008, the Elk Grove City Council established a charter commission. The proposed charter was later abandoned. Council members said that the charter, in part, would have circumvented the prevailing wage.

Vista won its charter approval in 2007 and soon afterward approved contracts to design and build two fire stations, bypassing the prevailing wage law.

The state building trades council sought to block Vista in San Diego Superior Court. It lost the case there, and again at the state Court of Appeal, before appealing to the state high court.

In Auburn, too few people went to the polls, Kirby said. And, he said, the opposition was well organized.

Now he accepts the voters' charter rejection.

"We work for the people who vote," he said.

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