It has only been a month and the recently approved minimum wage initiative, Proposition 206, is already inflicting permanent damage on Arizona’s Economy, hardworking taxpayers and our most vulnerable and needy residents.
Similar to previous proposals, Prop 206 was sold on the idea that Arizona could raise its minimum wage to $12 an hour (adjusted for inflation every year thereafter) and require employers offer mandated paid sick leave to employees without any negative repercussions. Reading the fine print of Prop 206 exposed this fraudulent claim; as the funders of the initiative (California Unions) exempted collective bargaining agreements from critical components of the initiative. If this was so good, why exempt themselves from it?
Now the debilitating impacts of Prop 206 are being felt, and they are far more widespread and catastrophic than even the opponents of the initiative realized. While it wasn’t a secret that Arizona businesses would face hard choices in order to comply with the wage hike, some of the worst hit organizations will be those that serve the neediest and most vulnerable populations in our state.

Currently in-home care services, many of which aid fragile and feeble seniors, range from $20-$24 an hour. These services will go up; pricing out many of these seniors on fixed-incomes from receiving the care they desperately need or force more individuals onto state welfare rolls.
The developmentally disabled in our community will also be devastated by Proposition 206. According to the President and CEO of the Centers for Habilitation and member of the Arizona Association of Providers for People with Disabilities, some providers will be forced to close operations as soon as January 1, 2017.
Some of these providers have contracts with the State of Arizona that set the reimbursement rates. This means the state will be forced to allocate more taxpayer money to cover the higher costs. If the state doesn’t cough up more tax dollars to address these needs, thousands of developmentally disabled in Arizona will be left without vital care.
It only gets worse from here.
Many subdivisions of the state such as school districts will also be deeply impacted by the voter mandate. Positions such as cross walk guards cafeteria workers and bus drivers, many of which are part time positions, represent a significant aggregate cost to schools; costs which were neither anticipated nor planned for by districts or the state.
For Chandler Unified School District, Prop 206’s passage represents a $1.1 million hit to their budget. Agua Fria Union High School District in the West Valley, $123,500. Peoria Unified District – $1.1 million by 2020. And Sahuarita District in southern Arizona $907,576. These are tremendous costs which will necessitate the diversion of other resources from teachers and students or require more monies from taxpayers.
And although the law does not apply to state or federal agencies, many government departments will still be on the hook. The State of Arizona has expenditure obligations for school districts as well as private contracts through AHCCCS (Arizona Healthcare Cost Containment Center System). But the legislature has already passed a budget for 2017. These additional costs were not included in the state’s budget.
Many voters that supported Prop 206 were not aware of the harmful effects this initiative would cause. Yet unlike bills proposed and passed at the legislature, there was no independent review, hearings, or public comment process of the initiative language to inform voters of these inevitable issues.
Now, even if voters wanted these issues fixed, Prop 206 can’t be modified because Arizona initiatives are bound by the strictest voter protection law in the country. Once a measure is passed at the ballot, it can’t be changed unless it is sent back to the voters, and that can’t happen for two years.
As the saying goes, “elections have consequences.” We suspect that the consequences of Prop 206, however, are not what Arizona voters signed up for.

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The Arizona Free Enterprise Club is a free market policy and advocacy group dedicated to promoting a strong and vibrant Arizona economy.