TUCSON, AZ (Tucson News Now) - Those hit the hardest by a unanimous ruling from Arizona Supreme Court are responding. A challenge of the voter-approved minimum wage increase was rejected unanimously.
Agencies who provide care for elderly and disabled individuals are reeling from the decision.
Unlike a restaurant or retail store, they can't legally change their prices to help offset the added money they need to pay their employees, according to Gina Judy with the Easter Seals Blake Foundation. They are tied into their rates through state contracts.
The plaintiffs had argued that the initiative creates new costs associated with the general fund. The state needs to pay some state contractors more and is not contributing a new revenue source.
Arizona Attorney General Mark Brnovich's office and the backers of Proposition 206 argued before the court last week that the increased costs were indirect and didn't require new funding.
Judy said many providers will be left with no choice but to reduce their services. She estimates about 25 percent of the 90 agencies under the Arizona Association of Providers for People with Disabilities will likely be forced to close their doors or merge with other agencies.
"There already (are) not enough direct care providers for this service. There are individuals that are waiting for residential care, or there are individuals waiting for respite care, or in-home care. There are just not enough providers already. So I assume that number will grow," Judy said.
She reiterated, after speaking with Tucson News Now one month ago before the first lawsuit hearing, that the minimum wage increase is a good thing for her employees.
In a statement, Judy said her foundation used to pay its workers "more than the $8.05 minimum wage before Proposition 206."
But Judy said that the majority of their employees are now back to working for the same wages as someone in a fast-food restaurant.
"This line of work requires considerable training, skill, and commitment," she said.
Judy said they see a high turnover rate in direct care positions, with workers choosing to go find employment in less stressful jobs.
"Vulnerable individuals throughout the state of Arizona will be the ones that are hurt the most, obviously. These are individuals that the services being provided are critical health and safety needs, and health and safety supports for these individuals," Judy said.
She explained that the Arizona Association of Providers for People with Disabilities estimates its network of providers needs $74 million to continue running through the next fiscal year. They are now more reliant on Gov. Doug Ducey's budget than ever before. His office allotted $25 million to keep these providers running, but that will only last until June 30.
Proposition 206 was approved in the November election by 58 percent of Arizona voters. The minimum wage was raised on Jan. 1 to $10 an hour from $8.05 an hour. It will rise as high as $12 an hour in 2020. The voter-approved proposition also created a right to paid sick time off from employment.