The incoming Speaker of the House, J.D. Mesnard, just happened to suggest on Monday that there appears to be legal grounds for someone to sue to overturn the Prop. 206 minimum wage hike approved by voters, but it won’t be him (wink, wink). House speaker mulls minimum wage lawsuit:
As to litigation, Mesnard said at this point he’s moving to take the case to court.
“I’m not spearheading anything,” he said. “Until today, I had no legal staff on hand,” Mesnard said, saying others may have to take the lead.
Mesnard does not need to file a lawsuit when he has the masters he serves in the Arizona Chamber of Commerce and Industry to do it for him. Mesnard’s feigned knowledge of a lawsuit was political Kabuki theater. He was coordinating with the Chamber and he knew full well when he made his “suggestion” of a lawsuit that the Chamber was prepared to file a lawsuit to overturn the will of the voters this week. Suit filed to block minimum wage hike:
Unable to defeat it at the ballot, business interests are now trying to get a judge to void the voter-approved hike in the state minimum wage.
The lawsuit filed Thursday in Maricopa County Superior Court contends Proposition 206 violates a constitutional provision which requires all measures that increase state funding to also have a specific dedicated funding source. The initiative does not spell out where the state will come up with the additional dollars it will need to cover the higher costs incurred by those who have contracts with the state to provide various services like health care.
Attorney Brett Johnson, hired by the Arizona Chamber of Commerce and Industry, points out that the Arizona Health Care Cost Containment System already has posted a notice that it intends to increase what it pays to providers to compensate for the fact the minimum wage will go fro $8.05 an hour now to $10.
AHCCCS officials have estimated the additional cost for the next six months at close to $48 million, with $11 million of that to be borne by the state.
More to the point, Johnson said those additional dollars will come out of general tax dollars, leaving less money for other priorities. And he said that is exactly what the constitutional provision about an identified funding source is designed to prevent.
But James Barton, attorney for Proposition 206 supporters, said there is no basis for the claim. He said nothing in the ballot measure actually requires the state to increase its reimbursement rate to providers.
In fact, Barton noted, the constitutional provision that is the basis for the Johnson’s challenge specifically says if a state agency believes an initiative increases its expenses but fails to provide the funds, the legal remedy is to simply refuse to spend the money. He said the fact that the state, on its own, may choose to increase reimbursement rates to compensate providers for their higher costs — something our Tea-Publican controlled legislature is loathed to do — [but this] does not mean the initiative is illegal.
A hearing is set for today before Judge Daniel Kiley.
When this losing argument fails, the Chamber has a few more legal theories up its sleeve.
Johnson also contends that the measure violates a separate constitutional provision which requires that ballot measures be limited to a “single subject.” He contends Proposition 206 runs afoul of that because it not only mandates higher wages but also requires employers to provide workers with at least three days a year of paid personal leave.
Note: In 2006, Arizona voters approved Proposition 202, the Arizona Minimum Wage Act, by a citizens initiative which set a higher minimum wage and adopted an automatic annual cost of living adjustment. Proposition 202 also gave local governments the right to enact their own higher minimum wage and “other benefits of employment,” e.g., paid time off. (A.R.S.§ 23-362, Paragraph I). In July 2015, the Court ruled that Arizona cities can raise the minimum wage.
[Johnson contends] “These topics should have been addressed in two separate ballot measures, rather than combined to encourage voters for one proposal to accept changes in the other,” the lawsuit states.
But Barton points out that the requirement for separate ballot measures applies only to constitutional amendment. Proposition 206 only amended state statute. Johnson, in his legal filings, concedes the point but nevertheless urges the court to apply the requirement in this situation.
“Because we are the Chamber of Commerce and we own this state, dammit! We are entitled to special privileges because we rule this state!”
What else has the Chamber got?
Johnson has one other legal theory in his bid to void the initiative.
He points out that the Industrial Commission of Arizona must prepare notices that employers are required to post at worksites about things like minimum wage requirements. Johnson contends that the cost to this agency is another example of an unfunded mandate.
Barton scoffed at the argument that will mean increased expenses, saying the commission produces all sorts of notices all of the time. And even if there were a cost, the relief for the agency is to refuse to spend the money, not to void the entire law.
You will recall that the Chamber organizations and Arizona Restaurant Association did not spend a great deal of money to try to defeat Prop. 206 on the merits. Their strategy was always to try to overturn the will of the voters in court if Prop. 206 passed.
In addition to the Arizona Chamber of Commerce and Industry, also signing onto the lawsuit were the Greater Phoenix Chamber of Commerce, the Tucson Hispanic Chamber of Commerce, Greater Flagstaff Chamber of Commerce, Arizona Licensed Beverage Association, and the owners of Valle Luna Inc., which runs several restaurants in the Phoenix area.
Tomas Robles, who chaired the pro-206 campaign, reacted angrily to the bid to kill the measure, which was approved on a margin of 58-42 percent.
“This lawsuit is just another example of the chamber and, frankly, Arizona Republicans trying to ignore the will of the voters,” he said.
Technically, the Arizona Republican Party is not involved in the litigation. But it opposed the initiative and Republican lawmakers attempted earlier this year to undermine the effort by crafting their own alternative which could have confused voters. That proposal was approved by the Senate but died in the House.
A strike-everything amendment to HCR2014, proposed by Sen. Don Shooter, would have declared a uniform minimum wage a “matter of statewide concern” in an attempt to void local ordinances authorized by the voters of this state in the Arizona Minimum Wage Act. Under Shooter’s proposal, counties, cities and towns would no longer have the explicit right to adopt their own minimum wage or employee benefit policies.
The successful initiative is built on a 2006 ballot measure [Prop. 202] which established Arizona’s first minimum wage at $6.75 an hour. Until then, employers were subject only to the federal $5.15 minimum.
With mandated inflation increases, the wage is now $8.05 an hour.
Proposition 206 sets the new floor at $10 an hour in January, rising to $12 by 2020, with future increases linked to inflation.
As with the original measure, there is a $3-an-hour “tip credit,” meaning employers whose workers get tips can pay as little as $9 an hour in 2020. But the statute also requires proof that the workers actually get that much in tips.
The new measure also has something not in the 2006 measure: the mandate for paid time off.
Local governments had the discretion to enact paid time off policies under Prop. 202 previously, something our Tea-Publican controlled legislature sought to void.
You will recall that earlier this year our lawless Tea-Publican legislature sought to gut the 2006 Minimum Wage Act. I previously posted about this multi-pronged attack on the Arizona Minimum Wage Act by our lawless Tea-Publican legislature and Governor “Il Duce.” Action Alert: GOP war on the Arizona Minimum Wage Act is up for vote in the House today, and Action Alert: GOP war on the Arizona Minimum Wage Act is in the Senate today.