PHOENIX — A judge on Wednesday refused to block a new voter-approved law raising Arizona’s minimum wage, turning away a challenge from top business groups in the state.
Maricopa County Superior Court Judge Daniel Kiley rejected arguments from the Arizona Chamber of Commerce and Industry, other chamber groups and a Phoenix-area restaurant operator that the law didn’t contain a source of revenue to handle increased state costs.
Kiley said the law exempts the state itself from having to pay the higher wages and there’s no mandate that it pay its contractors more for work they do on the state’s behalf, so the need for to a new revenue source isn’t triggered.
He also noted that though the state’s Medicaid program had decided to increase reimbursement rates on Jan. 1 for nursing homes, home health care aides and providers of care for developmentally disabled people, there’s no federal or state mandate that it do so.
Kiley accepted an argument by state Attorney General Mark Brnovich that the Legislature isn’t forced to fund the increases caused by the new law. Brnovich’s office defended the law along with proponents of Proposition 206, the measure that raises the minimum wage from $8.05 an hour to $10 on Jan. 1 and to $12 in 2020.
The judge also turned away an argument that the law illegally contained two separate subjects — a minimum wage increase and a mandate that employers give workers sick pay.
An estimated 700,000 Arizonans earn less than $10 an hour now, according to federal statistics cited by backers of the law.
The raises approved by the state Medicaid program are expected to cost $48 million for six months, although all but $11 million is federal money.
Kiley’s ruling turned away an effort to temporarily block the wage law pending a full trial. A trial could still be held, but it would likely be months away.
Chamber spokesman Garrick Taylor said the group’s leaders will consult with their attorneys and decide whether to appeal. If filed, an appeal would likely go directly to the Arizona Supreme Court.
“We have concerns regarding the constitutionality of the initiative and so we’ll determine whether that conversation continues,” Taylor said.
Tomas Robles, chairman of the group that backed the initiative, said the Chamber was claiming poverty for its members while spending hundreds of thousands of dollars on legal fees.
“I’m glad that the judge chose to be on the right side of history, and really protecting democracy more than anything,” Robles said. “The Chamber themselves are looking to completely disregard the will of the people, the will of the voters, because they want to keep their pockets fat.”
