A judge on Friday refused a request by business interests to immediately block the voter-approved hike in the minimum wage from taking effect as scheduled next year.
But he did agree to consider the legal arguments in depth this coming Tuesday.
Maricopa County Superior Court Judge Daniel Kiley rejected claims by challengers that leaving the law in place before the full-blown hearing on its legality will cause hardship for employers. Attorney Brett Johnson told him that while the law doesn’t take effect until January 1, its effects already are being felt as employers start making staffing decisions based on having to pay their workers at least $10 an hour on that date.
“They’re making business decisions right now as to whether to lay off people on Monday,” said Johnson who represents the Arizona Chamber of Commerce and other business groups. He said a ruling now putting the law on hold would mean that “over the weekend there’s not rash decisions made based off of Proposition 206.”
And Johnson said he presumes that, after a full-blown hearing, Kiley will agree the measure is unconstitutional, a presumption that supporters of the ballot measure do not concede.
Kiley, however, said there’s no basis for him to even consider whether to delay enforcement on the law, much less decide its constitutionality.
If nothing else, the judge noted that the challenge was filed only a day earlier. He said that means those defending the law — including both the attorney general’s office and Proposition 206 supporters — have not had a “fair opportunity” to respond to the allegations.
Nothing in Friday’s action gives any hint on whether the judge believes the charges by the business interests who sued that what voters approved is unconstitutional. But what is clear is that whoever loses in Kiley’s courtroom is virtually certain to ask the Arizona Supreme Court to overturn.
That raises an interesting side issue.
On Monday, the two new justices named by Gov. Doug Ducey, a foe of Proposition 206, are set to be sworn in. And expanding the court to seven could change the balance of political philosophies on the bench.
The initiative is simple enough: It requires employers to pay workers at least $10 an hour beginning January 1 — $7 for workers who earn at least $3 an hour in tips — and mandates at least three days of paid time off a year. The current state minimum is $8.05 an hour.
Business interests, led by the state chamber, made a half-hearted effort to convince voters to reject the measure after chamber President Glenn Hamer conceded the popular measure was likely to pass. Proposition 206 was approved on a 58-42 margin.
Now the organization, joined by local chambers and other business interests, hopes to quash the measure in court.
Johnson says the Arizona Constitution says any ballot measure which requires the state to spend more money must also include a dedicated funding source, such as a new or increased tax. This measure has no such levy.
The initiative has no direct costs as it specifically exempts the state from having to raise the pay of its own workers. But the Arizona Health Care Cost Containment System, the state’s Medicaid program, said this week it plans to increase what it pays private contractors who provide services for those with special needs, contractors who are now paying their employees less than $10.
Johnson contends that is a mandated cost which requires Kiley to void the measure.
But attorney Jim Barton said nothing in the measure requires the state to backfill the higher costs to the providers. And even if there were, he said the constitutional provision does not allow for the entire measure to be voided but only for the state to refuse to boost its reimbursement to the providers.
Don Shooter, the Yuma Republican who will chair the House Appropriations Committee, conceded Friday he does not know whether there is a legal obligation on the state to finance the additional costs incurred by the providers, a figure estimated by AHCCCS at $11 million for the next six months. But he believes there is a “moral responsibility” to come up with the cash.
Shooter also said he hopes the judge does enjoin the law from taking effect, but not because of the questions of the statute’s legality. He said the Legislature needs a few months to figure out how to either come up with the extra dollars or, possibly, ask voters at a special election if they are now having second thoughts given the additional costs to the state.