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Arizona Supreme Court Rules In Favor Of Minimum Wage Increase

Arizona’s new minimum wage is here to stay. Arizona’s high court ruled Wednesday that the new law isn’t a violation of the constitution.

The wage hike from $8.05 an hour to $10 kicked in at the beginning of the year, but opponents of Proposition 206 took one last shot at overturning the new law.

The Chamber of Commerce argued the voter-approved measure required the state to spend money without identifying a revenue source — a violation of state law. That’s because the state’s Medicaid program has to pay third party contractors, like caregivers for those with developmental disabilities, higher wages.

The "revenue source" rule, approved by voters in 2004, says that if a measure requires some new or increased state spending, it must also include a source of those funds. It is designed to keep initiatives from diverting existing revenues from other programs.

Proposition 206 has no direct effect on the state payroll as state employees are not covered by the measure. But opponents contended that the measure will force the Arizona Health Care Cost Containment System, the state's Medicaid program, to increase what it pays private firms that provide nursing home and in-home care.

Providers whose contracts were negotiated when they could pay their workers as little as $8.05 an hour said they would go out of business if forced to pay more. The state responded by increasing their reimbursement.

The Supreme Court disagreed with arguments that the rule made Proposition 206 unconstitutional, writing that’s a result of the state’s discretionary policies and nothing about the measure inherently requires the state to spend more.

"Proposition 206 itself does not requires the state to increase rates for AHCCCS providers or reimburse increased labor costs to other state contractors," Justice Ann Scott Timmer wrote for the unanimous panel. "And increasing the minimum wage and providing earned paid sick time for non-state workers does not inherently require the state to expend revenues."

The new wage law mandates employers provide at least three days of paid sick leave and eventually pay $12 an hour by 2020.

Capitol Media Services contributed to this report.

Will Stone grew up with the sounds of public radio. As a senior field correspondent, he strives to tell the same kind of powerful stories that got him into the business — whether that means trudging through some distant corner of the Sonoran Desert or uncovering an unknown injustice right down the street. Since joining the KJZZ newsroom in 2015, he has covered political scandals, fights over the future of energy, and efforts to care for some of Arizona’s most vulnerable communities. His pieces have also aired on national programs like Morning Edition, All Things Considered, Here & Now and Marketplace. Before coming to KJZZ, he reported for public radio stations in Nevada and Connecticut. Stone received his degree in English literature from Haverford College, where he also wrote about the arts and culture scene in Philadelphia. After graduating, he interned at NPR West in Culver City, California, where he learned from some of the network’s veteran reporters and editors. When he doesn’t have a mic in hand, Stone enjoys climbing mountains, running through his central Phoenix neighborhood and shamelessly promoting his cat, Barry.