Arizona Supreme Court justices weighing a challenge to a voter-approved increase in the minimum wage appeared to question Thursday how they could overturn the measure and still leave intact citizens' right to pass laws that's been in place since statehood.
Several justices asked the attorney representing the Arizona Chamber of Commerce and Industry and other business groups whether accepting his argument would kill the initiative process.
Chamber attorney Brett Johnson said the state expects to have an additional $21 million in costs in the 2018 budget year to help contract providers cover higher wages for caring for the elderly and disabled.
Because the measure approved by 58 percent of voters in the November election didn't provide a source for those funds, he argued it should be thrown out.
In fact, any expenditure to implement a voter-approved law needs to have that revenue source identified, Johnson argued.
"Doesn't that construction essentially eliminate the citizen's ability to pass any initiative?" Justice Ann Scott Timmer asked Johnson. "It's difficult to imagine an initiative in this day and age that wouldn't require a letter or anything ministerial by the government."
Johnson said it's essential that proponents of the initiative do their homework about whether it's going to violate the revenue source rule.
"There are multiple avenues to increase the minimum wage and this proposition is simply unconstitutional," the lawyer said.
State Attorney General Mark Brnovich and the backers of Proposition 206 say the higher costs aren't mandated because they go to contractors, and lawmakers could just not fund the expense. Justice Andrew Gould found that argument lacking.
"What's to stop a party from coming forward with a citizen's initiative knowing full well it's going to cost tens of millions of dollars and just ... saying in the initiative we're not going to require the expenditures here," Gould said. "If we had known, if the citizen's had known up front, that this was going to cost $50 million to $100 million a year for contract services with the state, that might have been a good thing to know up front?"
Assistant Attorney General Charles Grube said the state has discretion to make the higher payments, avoiding the mandate for a funding source required in the state Constitution.
Proposition 206 raised the minimum wage from $8.05 an hour to $10 an hour on Jan. 1 and to $12 in 2020, and also includes a provision requiring mandatory sick pay. An estimated 700,000 Arizonans earned less than $10 an hour when the raise went into effect on Jan. 1.
A Maricopa County Superior Court Judge came down on the side of Proposition 206 backers in December. Judge Daniel Kiley ruled that because it 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, there's no requiring for a funding source.
The justices questioned both sides for 45 minutes Thursday and said they will issue a ruling later.
Brnovich said after the hearing that the plain language of the law doesn't require the state to pay more and ruling otherwise would kill the initiative process.
"The reality is that if you accept the logic of the plaintiffs you would never have an initiative passed in this state again," he said.
Johnson said the spending triggered by Proposition 206 violates another voter-approved law from 2004, requiring the new source of funds, regardless of the consequences.
"If the state's going to spend $1 in support of a proposition that has been passed, it's going to trigger the revenue source rule," Johnson said outside court. "And yes, it's draconian, but that's what the people wanted."