Two Republicans joined Democrats in rejecting a measure that would have required Tucson and Flagstaff to pay for their minimum wages that are higher than the state mandates.
The vote comes from the House Ways and Means Committee.
The bill would have given businesses in those cities a tax credit equal to the difference between the local and the state minimum wages.
Democrats opposed the measure as they believed the bill would punish cities for what their voters approved.
The Republicans on the panel had different reasons for their dissent.
Rep. David Livingston argued a voter initiative passed in 2016 that allows cities to have higher minimum wages fuels inflation.
The measure has already passed the Senate and could be revived. But that would require support from Livingston and Republican Rep. Michael Carbone.
