WASHINGTON – As state and Flagstaff officials battle over who should bear the cost of the city’s higher minimum wage, service providers for people with disabilities say they feel caught in the crossfire.
Under a law that took effect Tuesday, the state can charge Flagstaff for added costs to state contracts that result from the city’s voter-approved $12-an-hour minimum wage, $1 more than the state rate.
The contracts most likely to be affected by the higher minimum wage are those for care providers – who say they are struggling to pay the mandated higher city wage because of what they call insufficient state funding for their services. Without help from one government or the other, they say, more providers will have to close up shop.
“If something doesn’t happen, we will not be able to continue,” said Monica Attridge, CEO of the Hozhoni Foundation, a nonprofit service provider based in Flagstaff. “I don’t know that we’d make it another year.”
Flagstaff voters in 2016 approved Proposition 414, mandating increases in the minimum wage until it reaches $15.50 an hour in 2022, or $2 more than the state’s minimum wage at that time, whichever is greater. The city’s minimum wage would rise along with the cost of living from then on.
State lawmakers struck back this spring, requiring state agencies to estimate the added costs for doing business in any county, city or town with a minimum wage exceeding the state rate – without mentioning that Flagstaff was the only such jurisdiction.
The law, signed in May, said the state must be reimbursed by the local government for the added costs, or have an equivalent amount withheld from state payments to the city.
The bill’s sponsors were not available for comment this week. But Flagstaff Mayor Coral Evans said city officials were blindsided by the measure, which she calls retaliation by legislators who disagree with the city’s minimum-wage increase.
“The state is actually punishing voters,” she said. “They are trying to make an example out of the city of Flagstaff.”
While the state and local governments feud, however, service providers say their situation is not getting any better.
“The state isn’t willing to ‘bail out Flagstaff.’ I’ve heard that over and over and over again,” said Jen Green, president and CEO of Strides 2 Thrive, which offers job training for Flagstaff residents with disabilities.
Services for people with disabilities, funded by the state government through Medicaid, took a major funding blow during the 2008 recession. The budget was cut by about 15 percent then and advocates say it has yet to get back to pre-recession levels.
Armando Bernasconi, the co-founder and CEO of Quality Connections, describes the provider network in Flagstaff as “crumbling.” Since 2017, the community has fallen from nine to six agencies, he said.
Fewer providers translate to fewer opportunities for people with disabilities, such as group homes and employment positions. And it’s not just services for his clients that are more costly: Bernasconi said that the higher minimum wage means local businesses can no longer afford to hire them.
“People with disabilities cannot find jobs in Flagstaff. They can’t find support in Flagstaff,” Bernasconi said. “We are ostracizing our most vulnerable population.”
He said recruitment prospects for caregivers are bleak in a “mentally, emotionally, physically grueling industry,” when fast-food restaurants may offer better pay.
Staff shortages and staff turnover remain persistent obstacles. Unable to pay more than minimum wage, many companies cannot keep a steady workforce – a crucial element in properly catering to people with disabilities.
“We have employees who have been with us for decades that are earning just about what their counterparts just starting out are earning,” Attridge said.
As a result, some residents with disabilities have been forced to uproot their lives in the city and relocate, Bernasconi said.
For now, the impact of the state’s reimbursement law on the city’s finances is uncertain. Deputy City Manager Shane Dille said officials in Flagstaff expect to get further details from the Arizona comptroller’s office by March.
Evans said she anticipates an invoice from the state next summer. If that bill increases annually, she said, the city will be forced to reconsider its budget, potentially leading to a cut in other services or an increase in fees on residents.
There may be some help on the horizon: Advocates pointed to another bill passed by the legislature that would allocate $2 in state funds for every $1 the city dedicates to care for those with disabilities. But Evans said the allocated price for disability services should fall on the state.
Advocates said they are skeptical that additional funding will come through to help their clients.
“These are people with significant to severe disabilities – they’re just caught in the middle,” Attridge said. “They’re being punished for something not only they couldn’t vote for, but they don’t even understand.
“It’s wrong of the city, it’s wrong of the state, to not step up and fund these services,” she said.