And they’re doing it in a way designed to circumvent restrictions voters imposed on lawmakers in 2016, which said cities could have their own base wages.

Senate Bill 1108, which is awaiting action in the Senate, requires employers in any city paying above the state minimum wage to pay the difference between what they must pay and what they can pay under the state minimum. It allows you to claim a 10% credit against

They don’t have to prove that they were actually paying anyone that minimum amount. Instead, under measures created by R-Flagstaff Sen. credit will occur.

That’s only half the proposal. SB1108 also deducts what local employers claim in credits from the state revenue distribution received by the city.

There are no figures on how much the affected cities will lose. The measure is written in such a way that it could deplete the city’s entire state fund, depending on how many companies have taken credit.

SB1108 currently targets two cities where voters have determined that voters should earn more than the statewide approved minimum wage in 2016. That figure is adjusted annually to compensate for inflation and is currently at $13.85.

That $13.85 happens to be the current minimum wage in Tucson. However, the city’s minimum charge will be raised to $14.25 after the end of the year.

In Flagstaff, the current lowest price is $16.80. A voter-approved ordinance there calls for future minimums to be at least $2 higher than state figures.

If SB1108 becomes law, it will also act as an economic deterrent to voters in other communities who want to approve their own minimum wage.

Leading the hearings this week was Joe Galli, a lobbyist for the Greater Flagstaff Chamber of Commerce. He said local laws created difficulties for businesses operating in the city.

“If there’s a restaurant and gas station in the county, and there’s a restaurant and gas station in the city limits across the street, an individual in that county gets $2.95 less an hour than the city,” Gurry told Republicans. Told. The Senate Finance Committee, administered by the Senate, approved the bill in a 4-3 partisan vote. SB1108 will allow employers in those cities to recoup some of the additional costs, Galli said.

That elicited a question from D Tempe Sen. Mitzi Epstein.

She said the measure wouldn’t just cover the cost of their pay raise, which would otherwise be $13.85 an hour, or whatever the state’s minimum wage is at a particular hour. He pointed out that the company can charge the difference in each employee’s hourly wage regardless of how much the employee was previously paid, calling it a “windfall.”

But Sen. JD Mesnard of R-Chandler said it looked justified.

“The moment you set a minimum wage minimum wage, you think you need to promote someone or pay more than minimum wage. Everything else shifts above minimum wage.” We do,” says Mesnard. He said. Put another way, if the minimum wage goes up, others with more responsibility will have to pay that amount plus the difference.

Epstein said he was also concerned that SB1108 would defy the 2016 ballot measure. Specifically, it says cities are free to enact their own minimum wages, as long as the numbers are higher than the state base.

The Arizona Constitution prohibits changing anything voter-approved unless legislators enact it with a three-fourths vote, but only if it “advances the purpose” behind the original bill . Hard to prove.

However, Mesnard said the proposal did nothing against the Voter Recognition Act of 2016. He said cities are legally free to set whatever minimum they want, but lose some of their state revenue when businesses start claiming state tax credits for higher costs. It will be

R-Mesa Senator Eva Birch said she does not support the argument that SB1108 and its financial penalties do not effectively undermine voter-approved 2016 legislation. “It changes the outcome of that decision,” she said.

“I think Arizona people voted to empower their communities to enact the minimum wage they deserve,” Birch continued. She said voters who endorsed higher local wages cannot expect lawmakers to return years later and impose financial penalties on them for doing so.

“It undermines the will of voters,” Birch said.

On the question of how a minimum wage hike would affect businesses, Epstein disputed Gurry’s assertion that higher costs mean smaller businesses.

“How wonderful that at that minimum wage, workers have more money in their pockets so they can go to bowling alleys where they probably didn’t have money.” “They could only afford groceries and food and housing. That was the end of it. And now they can go to the local bowling alley.”

She said the state has a “pretty good economy” after a voter-approved state minimum wage. “We didn’t lose a lot of jobs,” Epstein said.

R-Sierra Vista Senator David Gowan offered a different take.

“The bowling alley we’re talking about isn’t there anymore to go bowling,” he said.

Doing the math in my head, which Mr. Gowan admits, I found that 10 employees worked 10 hours a day, making an extra $30 a day, or $9,000 a month. Taking more than a year, Gowan said, means he has to set aside an additional $100,000 to cover the costs, making him more expensive than out-of-city businesses that don’t have to pay higher wages. is $100,000 more.

“I don’t understand how some companies can keep it open,” he said.