Earlier this month, the Arizona media would have had you believe that Governor Doug Ducey was taking a hands-off approach to the Arizona Chamber of Commerce lawsuit challenging the Minimum Wage initiative, Prop. 206. Ducey offers minimum comment on minimum-wage lawsuit:
“I want to let it work its way through the courts,” Ducey told reporters. “We’ll let the lawyers do what they do, and we’ll deal with the decision.”
“I’ve asked all my agencies to follow the law,” he said. “They will deal with the results. We are planning and budgeting as if this has passed.”
This of course was bullshit, and any self-respecting reporter knew it was bullshit at the time. Governor Ducey opposed Prop. 206.
The Chamber lawsuit has been coordinated with the GOP leadership, as I have previously posted. Chambers of Commerce sue to overturn the will of the voters on Minimum Wage Initiative. There is also the obvious clue that state agencies under executive control have taken a position opposed to Prop. 206. State Medicaid agency sides with foes of minimum wage boost.
Now that this case has moved to the Arizona Supreme Court, Governor Ducey and the GOP leadership of the legislature have dropped the pretense: it is the Low Wages Party and its Chamber allies that want to thwart the will of the voters in raising the minimum wage. The Arizona Capitol Times (subscription required) reports, Ducey’s budget office, legislative leaders seek to block Prop 206:
The governor’s budget office and the Legislature’s new leaders this afternoon joined the business community in asking the Supreme Court to stay the implementation of a minimum wage hike until after the litigation over the initiative has been resolved.
In an amicus brief, Speaker-elect J.D. Mesnard, Senate President-elect Steve Yarbrough and Gov. Doug Ducey’s Office of Office of Strategic Planning & Budgeting told the court that Proposition 206, if allowed to take effect, would impose a “significant hardship” on the Legislature and Arizona’s taxpayers.
“Its implementation will necessitate significant, and immediate, expenditures from the General Fund,” the legislative leaders wrote.
The state cannot reasonably argue a “significant hardship on the legislature” because the state possesses a power that others do not: the power to tax to meet its fiscal obligations. Arizona Constitution, Article 9, Section 3:
Section 3. The legislature shall provide by law for an annual tax sufficient, with other sources of revenue, to defray the necessary ordinary expenses of the state for each fiscal year. And for the purpose of paying the state debt, if there be any, the legislature shall provide for levying an annual tax sufficient to pay the annual interest and the principal of such debt within twenty-five years from the final passage of the law creating the debt. . .
The fact that we have a governor and Tea-Publican controlled legislature ideologically opposed to raising taxes and complying with the Arizona Constitution is irrelevant. Their dereliction of duty is a political decision. They have the constitutional power to do so.
As for the “significant hardship to taxpayers,” the taxpayers voted to raise the minimum wage. (Yes, I know, Tea-Publcans believe that only businesses pay taxes). Prop. 206 won more votes than any other measure or candidate on the November ballot. The taxpayers decided that this was a reasonable burden. The court should not substitute the opinion of our governor and legislature for the will of the voters.
Moreover, the undue burden that the court should be considering is that to low-wage workers who will be denied the increase in pay duly authorized by an overwhelming majority of the voters of this state at an election. Judge Kiley in his opinion wrote, “In the court’s view, delaying the promised pay raise would impose a significant hardship on low-wage workers.” He is correct.
The Arizona Chamber of Commerce last week asked the Arizona Supreme Court to reverse Maricopa Superior Court Judge Daniel Kiley’s order denying the chamber’s request for a preliminary injunction to block the voter-approved minimum wage hike. The chamber also asked the justices to stay its implementation on the grounds that it violates the Arizona Constitution’s single-source and separate-amendment rules.
Mesnard, Yarbrough and Ducey’s OSPB raised a familiar argument. They said under Prop 206, the state is obligated to increase its reimbursements to private contractors that provide state-mandated health and other services through the Arizona Health Care Cost Containment System.
The failure to do so, they said, would compromise the state’s ability to maintain an adequate network of providers, which the federal government mandates.
Unless Prop 206 is stayed, lawmakers would have to allocate “millions of dollars” to help ensure that providers are able to meet new wage and benefits obligations, they said.
This is your job, as mandated by the Arizona Constitution. I suggest that you start doing it.
They cited an estimate by AHCCCS that costs in the current fiscal year will spike by $25.1 million, of which $7.7 million will come from the state general fund. Other agencies are also expected to see their costs grow as a result of Prop 206, they said.
They added that they are “uniquely positioned to observe, bear and articulate the brunt of the complications and uncertainties that implementation of Proposition 206 will inevitably inject into the budgetary process.”
AHCCCS earlier told Judge Kiley that that “an increase of payments is necessary,” but emphasized that it made that determination at its discretion.
AHCCCS said neither federal nor state laws require adjustments to providers’ contracts whenever their labor costs increase, as the Arizona Chamber of Commerce and plaintiffs claimed. Nonetheless, AHCCCS concluded that spending increases are necessary to comply with federal law.
The Prop 206 campaign’s lawyers said the motion to stay implementation of the new minimum wage law should be rejected because the plaintiffs failed to establish that they would succeed on the merits to justify delaying the citizens’ will.
Citing case law, attorneys Israel Torres, Jim Barton and Saman Golestan said any challenge to the legal sufficiency of initiatives becomes moot when brought after the election.
Additionally, neither the Arizona Constitution’s single-source nor separate-amendment rule applies to initiatives, which Kiley also noted in his ruling.
The lawyers argued that Prop 206 contains a single subject, as minimum wages and benefits have been considered together in the long-running tug of war between the people and the Legislature, who have both asserted authority in setting them.
The lawyers insisted that Prop 206 does not impose a “mandatory” spending of state funds and noted AHCCCS’s nuanced position on the case.
“To perform a legal analysis, the court need only evaluate whether the proposition mandates an expenditure of state funds. By increasing costs for private government contractors, it does not,” they argued.
The only Republican in Arizona standing up for the will of the voters is Attorney General Mark Brnovich, whose office is tasked with defending Prop. 206 in court. He is doing it only because it is his job. Ducey administration, AG at odds over minimum wage lawsuit:
Tuesday’s legal arguments put the Ducey administration at odds with Attorney General Mark Brnovich whose agency is defending the constitutionality of the law.
Assistant Attorney General Charles Grube did not dispute that AHCCCS may be moving to increase what it pays its contractors to keep them on board. But he told Kiley that the constitutional provision being cited by foes as a reason to overturn the initiative only makes it illegal if it “proposes a mandatory expenditure of state revenues for any purpose.”
He said that language was designed to ensure that voters did not enact new or expanded programs without coming up with a way to pay for it. Grube said while AHCCCS may believe it needs to pay its contractors more, nothing in the initiative itself actually mandates it.
Ditto, he said, of claims by the Industrial Commission that a new requirement in Proposition 206 for companies to provide workers with at least three days of paid personal leave will force that agency to hire people to enforce that.
Grube said that’s a decision of the agency, not anything mandated by the initiative. And he cited several Arizona laws which say that the state cannot be forced to spend money it does not have.
The Arizona Supreme Court is expected to rule on the injunction request by the close of business on Friday. To get the injunction opponents of Prop. 206 need to show not only an undue hardship, but also both a likelihood of success after a full-blown trial — Judge Kiley ruled that the claim was “meritless” — as well as how halting the law would be in the “public interest,” not the Chamber’s interest. This does not appear likely. But you never know.