Organizations that contract with the state to provide services for adults with developmental disabilities are waiting to find out whether the Arizona Department of Economic Security will free up some of its new funding to help cover the increased costs they’re incurring due to Arizona’s rising minimum wage.
The budget for fiscal year 2020 includes an additional $13 million to help developmental disability providers cover increased minimum wage costs. GOP lawmakers and Gov. Doug Ducey included the money as one-time funding in the fiscal year 2019 budget, and the new budget makes that funding permanent and ongoing.
Ducey and lawmakers also approved another $13 million increase for providers. But whether that will also provide them with extra money to pay their employees’ wages remains to be seen.
The money must go to developmental disability providers. However, unlike the other pot of $13 million, it is not specifically earmarked for minimum-wage-related costs. Lobbyist Stuart Goodman, who represents the Arizona Association of Providers for People with Disabilities, said providers are hoping DES will put that money toward wages.
There are a lot of things besides defraying the costs related to Proposition 206, which voters approved in 2016, that the money could go toward. For example, DES could earmark it for physical, speech or occupational therapies, Goodman said. DES spokeswoman Tasya Peterson said the money could also go to residential and day programs, or support services for clients living either at home or in group homes.
Goodman said Prop. 206 services and non-Prop. 206 services are both important. But AAPPD’s priority is funding for wages, and he said it’s concerning that the money isn’t earmarked for that purpose.
“It gives the department flexibility to look at its own priorities, in addition to those of providers,” Goodman said. “We recognize the department has other needs, as well, and they’re going to have to balance those two competing challenges.”
Peterson said the agency will determine how to use that additional funding after meeting with stakeholders, a process she expects to begin in late June.
“There is not a specific methodology, as DES will need to solicit input from the community,” she said.
Prop. 206 exacerbated funding and wage issues that had been plaguing providers since the Great Recession. In response to a massive budget crisis, Republican lawmakers slashed funding to providers in 2009 and 2010, and that funding has never fully recovered.
At the start of the session, AAPPD sought an addition $42.2 million in funding for providers – $28.2 million for Prop. 206, and another $14 million to replace funding that was cut during the 2009-10 budget crisis. Providers sought that in addition to the $13 million in one-time funding that was made permanent in the fiscal year 2020 budget.
If the $13 million in additional funding goes to Prop. 206-related wages, Goodman said that would still leave them about $15 million short of where they’d hoped to be.
Providers have struggled to attract and retain employees in the face of a rising minimum wage and inadequate state funding.The work can be difficult, especially when dealing with people with severe behavioral issues, providing medication, maintaining feeding tubes and even changing adult diapers in some cases. And many providers say it’s imperative that they pay above the minimum, because for minimum wage, people can get jobs that are far less difficult.
Arizona’s minimum wage is currently $11 an hour and will increase to $12 next year. In Flagstaff, wages are even higher, thanks to a measure approved by the city’s voters in 2016, and reaffirmed last year. The minimum wage in Flagstaff is currently $12, and it will eventually reach $15.50 in 2022.
Ducey and GOP lawmakers included a provision in the budget that requires Flagstaff and any other city that raises its minimum wage above the state level – no other city has done so yet – to cover some of the costs incurred by the state as a result. Flagstaff will be able to pay $150,000 to the state, which DES would use to draw down $350,000 in federal funding to pay developmental disability service providers in the city.