Business
Tucson Schools Invest $2.3M in Response to Arizona’s New Minimum-Wage Boost
Arizona’s recent minimum-wage hike has strained Tucson-area school districts, costing them $2.3 million to adjust the pay of nearly 2,000 employees this year.
Unlike businesses that can pass on costs to consumers, school district budgets are fixed by state formulas. These formulas leave no room for quick adjustments. In November, Arizona voters enacted Proposition 206, raising the minimum wage from $8.05 to $10 an hour from Jan. 1, with plans to increase it to $12 an hour by 2020.
The proposition also introduced paid sick leave—a policy effective from July 1.
Most school districts had limited time to revise their budgets, which are largely allocated to personnel costs. Consequently, covering the wage hike has been challenging.
Among the nine Tucson-area districts, Vail and Tucson Unified School District (TUSD) bore the brunt. Vail spent $544,730 and TUSD $480,000 this year.
“We supported the higher wages but were unprepared for the immediate implementation,” stated Lisa Cervantez, Vail Unified School District’s chief administrative officer. Vail and TUSD, serving 60,000 students combined, are now contemplating reducing hourly and professional positions, cutting work schedules, and leaving certain vacancies unfilled.
Interestingly, Flowing Wells Unified School District emerged unscathed as all permanent employees earned above $10 an hour before the new law took effect. Superintendent David Baker clarified that only student workers and substitutes, considered temporary roles, were below the new wage threshold.
Employees primarily affected include special needs care professionals, clerks, school monitors, custodians, and groundskeepers.
Monica Rodriguez, a paraprofessional at Ocotillo Ridge Elementary, benefitted personally from the wage increase. “Being compensated fairly makes me feel appreciated and motivated,” Rodriguez shared.
The wage hike has also led to “wage compression,” compelling increases for employees already making $10 an hour to maintain equitable pay levels. TUSD’s budget constraints mean addressing wage compression is off the table for now, a concern for longtime employees.
Vail’s modest salary increases to handle wage compression have pushed overall expenses to nearly $1.4 million. Cervantez noted this hike has siphoned off funds intended for capital and building renewal projects.
Years of underfunding by the state have forced districts like TUSD and Vail to dip into general funds—allocated for operational costs like salaries—to cover capital expenditures.
Proposition 206 advocates argue that fair wages will eventually benefit local businesses and communities. Bill Scheel, who managed the campaign, acknowledged the financial strain but emphasized systemic underfunding as the real issue.
“Paying workers fair wages benefits all sectors through increased spending,” added Peter Herran, TUSD’s AFSCME division chair.
The new sick leave policy allows up to 40 hours of paid leave annually, accrued at one hour for every 30 hours worked. This applies to both full- and part-time employees, aiming to benefit workers with families.
Despite the financial woes, proponents believe the long-term benefits of a higher wage floor will outweigh the short-term budgetary pressures.
Opponents, like Lea Márquez-Peterson of the Tucson Hispanic Chamber of Commerce, argued that the fast-tracked implementation posed challenges, particularly for small businesses and schools that could not readily adjust budgets.
The Arizona Chamber of Commerce’s legal challenge claimed the measure was unconstitutional due to lack of a specified funding source. However, the Arizona Supreme Court upheld the voter-approved law.
“We weren’t prepared for this,” admitted TUSD CFO Karla Soto, recognizing the Supreme Court’s decision as binding and final.
Leah Merrall is a University of Arizona journalism student apprenticing at the Arizona Daily Star. Reach her at starapprentice@tucson.com.
