The Arizona Chamber of Commerce is leading a lawsuit seeking to halt the minimum wage increase that overwhelmingly approved in November.

The state chamber, joined by several local chambers, and two Arizona taxpayers and restaurant owners, f complaint this morning against state agencies in Maricopa County Superior Court seeking an immediate in against Proposition 206, which is set to take effect next month.

The ballot initiative hikes the minimum wage from $8.05 to $10 starting January 1. By 2020, the minimu would rise to $12 an hour.

Prop. 206 also affords full­time employee paid sick leave benefits, which attorneys for the Arizona Chamb Commerce argued are harmful to private businesses, which must bear the burden of increased costs.

The case hinges on arguments that the ballot measure violates a requirement in the Arizona Constitution new voter­mandated spending designate a funding source to cover its costs. The funding stream may not from the general fund. Attorneys for the chamber also claimed that the initiative violates the constitution’ amendment” rule, and argued that minimum wages and employee benefits are two distinct issues that sh required separate ballot measures.

State agencies, such as the Arizona Health Care Cost Containment System, the Arizona Department of Administration, and the State Procurement Office all have contracts with private vendors and “these contr require the state to pay or reimburse its vendors for wages and benefits that the vendors must pay their employees,” wrote attorneys Brett Johnson and Tim La Sota. Several of those contractors are members of chamber, the complaint also noted.

The costs of minimum wage and employee benefits, such as the new paid sick leave requirement, are an allowable cost” per some contracts, according to the complaint.

The attorneys argued that lawmakers and Ducey’s administration don’t have a choice and must appropria funds, as they are legally obligated to do so according to the contracts the state has inked with certain ve which provide legally­obligated state services, the complaint said.

The lawyers said Prop. 206 does not provide for a mechanism to cover the new costs associated with the wage increase and additional benefits that the initiative now mandates.

Chamber President Glenn Hamer said out­of­state backers of Prop. 206 stumbled in their attempt to avoid constitutional requirement that any new voter­mandated spending include a source of revenue to fund th spending.

“Let’s not be cutesy by half here. It’s going to compel additional resources in some manner. And I would j you’re going to go to the ballot, and you’re going to have an idea, it should comply with the state constit Hamer said. “This clearly affects the state budget. It was never advertised as such.”

Hamer noted that state health officials are already increasing spending to cover labor costs associated wit 206, and said the chamber has a strong case for arguing that the initiative has a direct impact on govern spending, and, therefore, on taxpayers.

While it’s the government that must increase spending, Hamer said he believes the chamber’s clients, whi government contracts, as well as taxpayers at large, have a strong legal ground to argue for standing in t

“Who’s going to wind up paying for the additional funds that we’ll be required to operate under Prop. 206 taxpayers,” Hamer said.

“You’ve got a situation where this was never discussed, never advertised. It was all ‘morning in America’ now we’re seeing what really happens when you try to dramatically distort wage levels,” he added.

The lawsuit also claims that the initiative “cobbles together two separate and distinct matters,” arguing th and employee benefits are different.

“The way our constitution was set up, we believe they would require two separate ballot initiatives,” Ham

Jim Barton, an attorney for the Fair Wages and Healthy Families campaign, which backed Prop. 206, calle chamber’s legal arguments “ridiculous” and “unfounded.”

The single­amendment rule doesn’t apply to Prop. 206 because it did not propose an amendment to the Constitution, Barton said. Prop. 206 changed state statute.

Further, the Legislature is not required to increase spending, as its authority to appropriate funds is unaff Prop. 206, Barton said.

“The Arizona Legislature has chosen to outsource certain government functions. That choice means those are not employed by the state of Arizona. And that means increasing the wages of those people does not an expenditure of state funds,” Barton said. “The fact that it’s the right thing to do, and it’s morally repug do it, doesn’t change it into a mandate.”

The Greater Phoenix Chamber of Commerce, the Flagstaff Chamber of Commerce, and the Tucson Hispan Chamber of Commerce are plaintiffs on the case, as is the Arizona Licensed Beverage Association. Jane a Riddle, owners of Valle Luna, a chain of Mexican restaurants, also joined the lawsuit.

Flagstaff voters adopted a minimum wage of $12 effective July 2017. The wage there must rise to $15 by

Hamer said more plaintiffs may join the case at a later date.

The complaint names the Industrial Commission and its commissioners as defendants, as well as AHCCCS director, Tom Betlach, ADOA and its director, Craig Brown, and the State Procurement Office and its direct Seth.

Barton said he will intervene on behalf of the Prop. 206 campaign.

“It would be irresponsible for us to leave it to the [Ducey] administration to defend,” he said. “I think the administration is pretty on record as being opposed to minimum wage.”
A call to Gov. Doug Ducey’s administration, which officially opposed the minimum wage hike, was not im returned.