PHOENIX — The outcome of a legal fight between Flagstaff and state lawmakers could affect the decision by Tucson residents of whether they want to vote in November to impose their own minimum wage.
Legislators are trying to enforce a provision in the new state budget that financially penalizes cities, towns and counties whose residents adopt a minimum wage higher than the $12.15 an hour required by the state.
For the moment, their efforts are aimed at Flagstaff, where voters in 2016 agreed to increase the minimum to $15.
But it comes as there will be a measure on the November ballot in Tucson asking to get to the same wage point, in steps, by 2025.
If the state wins a lawsuit playing out in Maricopa County Superior Court, it could force Tucson voters to decide whether the loss of revenues to run local government is worth the decision to ensure those at the bottom of the pay scale earn what proponents say is closer to a “living wage.”
How much Tucson might forfeit in state aid is not spelled out.
But the state is trying to take more than $1.1 million from Flagstaff, which has an estimated population of about 75,200. Extrapolating that out to Tucson with close to 550,000 residents could translate into an annual loss of about $8.1 million.
Flagstaff, represented by attorney Roopali Desai, wants to keep it from getting that far.
They are asking a judge to void the provision in the new state budget that imposes that $1.1 million penalty against Flagstaff. The figure is supposed to represent the additional costs borne by the state between the state’s $12.15 figure and the $15 minimum Flagstaff voters adopted.
In new court filings, Desai disputes the figure.
She noted the Flagstaff ordinance specifically exempts state employees. And Desai said some of the other claims of higher costs, such as from Coconino Community College, really are not obligations of the state.
But the heart of her claim is that the provision itself is unconstitutional.
Desai pointed out that both the original 2006 statewide initiative that first established a state minimum wage and a 2016 revision that increased the numbers specifically allow local communities to establish their own wage laws. The only requirement is that the figure be at least as much as the state requires.
She contends the law requiring the reimbursement runs afoul of the Voter Protection Act, a constitutional provision that bars the Legislature from repealing or altering anything approved at the ballot box.
The only exception is when a legislative act “furthers the purpose’’ of what voters approved, something Desai said this does not do. Even if it did, she said, it would require a three-fourths vote of both the House and the Senate, which this measure did not get.
The state is fighting the Flagstaff lawsuit, with an emergency hearing set for later this month before Judge James Smith.
Attorney General Mark Brnovich is defending the state law, said his spokeswoman Katie Conner, because it will “protect taxpayers from having to absorb the costs associated with a city or town’s decision to raise the minimum wage.’’
Central to the dispute is a provision that first appeared in the 2019-2020 state budget. It allows the Legislature to allocate — and the state Department of Administration to assess — the amount to reimburse the state for any costs from having a higher minimum wage than in state law.
There is no direct cost to the state. The adopted Flagstaff ordinance and the one that will be on the November ballot in Tucson do not apply to state employees, including those working in the university system.
But for others, the minimum wage paid in Tucson would go to $13 an hour in April. Then there would be a series of increases taking it to $15 in 2025, with future increases linked to inflation.
The argument of state lawmakers is there are indirect effects, like the Department of Economic Security having to pay more to providers of services for the developmentally disabled.
Those private companies now have to pay their Flagstaff employees that city’s minimum wage rather than the lower state figure. The same would be true if the Tucson measure becomes law.
It was not until this year, however, that legislators actually put wording into the budget demanding that any community with a higher minimum wage pay an actual assessment.
And the state law has teeth. It says if Flagstaff doesn’t pay that $1.1 million by the end of the calendar year, the state treasurer must deduct that amount from its revenue sharing. Desai wants to prevent that from happening to Flagstaff and, if she wins, to preclude a similar financial hit on Tucson.
She told the judge that the funding loss for Flagstaff would be substantial, amounting to about 13% of the city’s state shared sales tax.
“The assessment and resulting loss of revenues will likely disrupt the city’s operations, cause the city to reduce its services, and create delays in the city’s infrastructure and capital replacement,’’ Desai told the judge.
She said the city council already was forced to account for the loss of the dollars in planning expenditures, with tangible results.
For example, she said the city does not have the money to replace its aging body cameras for police officers. It also lacks funding for overtime pay for public safety employees as well as to upgrade its computer systems and cybersecurity measures. And then there’s the $1.4 million the city had planned to spend to replace its ladder truck, the only one in the region.
In seeking to block lawmakers from penalizing communities with their own minimum wage, Desai pointed out this isn’t the first time lawmakers have tried to get around what voters approved.
The first came in 2013 with legislation that sought to say local governments had no power to set their own minimum wage.
When challengers filed suit, the attorney general did not defend the state law, instead agreeing that the measure is invalid.
Lawmakers were back in 2016 with a new measure, this one leaving intact the ability of cities to set their own minimum wages but seeking to bar them from setting standards for paid and unpaid leave, meal breaks and rest periods.
That case went to trial, with the state Court of Appeals saying the voter-approved initiative specifically lets local governments establish not just wages but other benefits.
That led to this 2019 law about local reimbursement that’s now being challenged.
