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Arizona law means local minimum wage hikes may bear a cost

PHOENIX (AP) — A state law taking effect Tuesday could make cities and counties reimburse the state for new costs resulting from a local minimum wage above the statewide rate.

The Arizona Republic reports the provisions in a budget law enacted last spring require the heads of state agencies and programs to calculate higher costs for services in communities with a higher minimum wage.

The measure, as part of a budget bill approved by the Legislature and signed into law by Gov. Doug Ducey last spring, also allows the state to then assess reimbursement amounts owed by local governments.

Supporters says it’s only fair to protect taxpayers statewide from added costs resulting from decisions by local communities, while critics say it’s a pressure tactic intended to discourage cities from raising minimum wages.

“The message is: Other cities, you do this at your own peril,” said state Rep. Randall Friese, a Tucson Democrat who opposed the measure, describing it later as governing with a vindictive tone.

Arizona voters in 2016 raised the minimum wage to $10 in 2017, $10.50 in 2018, $11 an hour this year and $12 an hour in 2020, with adjustments for inflation after that.

Flagstaff voters went further, requiring a minimum wage of $12 this year. The city’s minimum wage will go up to $15.50 in 2022 and must be $2 above the state minimum wage in the future if Arizona raises its rate again.

“We don’t feel the taxpayers around the state should be forced to bear the burden of the additional cost,” said Rep. Regina Cobb, R-Kingman.

Flagstaff residents last year rejected a ballot measure last year that would have rolled back the city’s minimum wage increase.

It will be up to the next Legislature to decide whether to collect reimbursements for additional costs from revenue the state splits with cities.

Tom Belshe, deputy director of the League of Arizona Cities and Towns, called the measure as a form of pre-emption by the state.

“I do believe it was meant to have a chilling effect,” he said.

Associated Press

Associated Press

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