Photo by Aaron Ricca.
KINGMAN – The people have spoken.
Proposition 206 – the Fair Wages and Healthy Families Act – will give Arizona’s low-wage workers a pay boost, but it will leave Kingman Unified School District clawing for the cash to pay for it.
Things were looking good when Proposition 123 passed in May. They looked even better when the district used that money for a district-wide pay raise at the beginning of the school year. But when Prop 206 passed this month, it might’ve thrown finances and morale under the bus.
“I think everybody was in favor of being able to pay workers more wages, we all understand the minimum wage was very low,” said Superintendent Roger Jacks. “The immediate concern I heard was ‘can the district afford to do that.’”
Prop 206 calls for a $12 an hour minimum wage by 2020. Arizona’s current minimum wage is $8.05 an hour. There will be a gradual increase leading up the $12 rate, starting with $10 per hour in January, $10.50 per hour in 2018, $11 per hour in 2019, $12 per hour in 2020 and starting in 2021, the minimum wage will be annually adjusted based on the cost of living index.
The district has 288 employees earning under the new $10 an hour requirement in positions such as bus monitors, custodial and maintenance staff and cafeteria workers. Most of those are full-time positions. On-call substitute teachers and classroom aids are part-time employees who also fall into that category.
Paid sick leave for both part and full-time workers is another issue. Employers will be provided one hour of paid sick time for every 30 hours worked. Employers with 15 or more employees must allow at least 40 hours of paid leave annually.
The district already provides sick leave to all permanent employees working more than 35 hours in a week. KUSD Finance Director Heather Shaw-Burton explained leave is prorated based on the number of hours they work each week. For example, a 40 hour employee earns eight hours of sick leave per month.
“We are still seeking direction from the state on what this means for our temporary staff members,” Burton said.
Fears of slashed manpower and hours permeates the district, affecting both employees and administrators.
Jacks sent out a statement right after Election Day reassuring employees they could comply with the measure and there would be no reduction in hours, no layoffs and no reductions in benefits “just to reassure our workers that we’re going to find a way to absorb that new law.”
The first leg of Prop 206 will cost the district more than $400,000. Thanks to recent budget recalculations of state payments to the district by Burton, the low cost of diesel fuel for buses and the four-day school week, KUSD will be able to comply with the $10 wage starting Jan. 1, but only until June 31, the end of the 2016-17 fiscal year.
“We are looking at the district budget for other savings opportunities,” Burton said.
Hard Feelings Inevitable
Compression if wages are frozen and the resultant morale issues – similar to those that hit Mohave County Sheriff’s deputies for years – could also impact the district. New employees could start off at a wage close to what a seasoned employee worked years to earn, which could spur animosity among senior employees. Jacks has received emails from employees questioning fairness in the wage system.
“We reassured them that we understand the concerns,” he said. “We’re looking at our financial situation to see if there’s anything we can do.”
Both Jacks and Burton agree it would be impossible to give the same $1.85 raise to experienced employees. Burton estimated the cost at nearly $3 million.
“Ideally everyone goes up $1.85,” Jacks said.
“We’d love to be able to do that,” Burton said. “It’s just not in the cards for us.”
Ernie Tapia, lead custodian at Manzanita Elementary School and a 26-year district employee, is one worker who will wade the rough tide of Prop 206. He and two subordinate custodians make more than the $10 wage (he wouldn’t say how much). He’s glad there are raises on the horizon, but isn’t sure how the compression factor might affect his employee’s morale.
“I don’t know how they’ll react, but I think they understand the situation,” he said. “I wouldn’t be happy, but there’s not much I could do about it.”
Hoping for the Best
“Right now we’re just trying to look in a positive light towards next year and trying to make long term plans,” said Jacks.
While businesses can raise prices to compensate for the wage increase, Prop 206 is an unfunded mandate for the school districts. It may be up to the Arizona Department of Education and state Legislature to find a way to plug future money gaps.
“We have to be optimistic the legislators will pass a budget for schools that helps comply with Prop 206,” Jacks said. “If it doesn’t, we have to find a way to make it work.”
Raising taxes to compensate for shortfalls will undoubtedly ire voters and the school can’t issue levies at the moment.
“Our hands are tied as far as that’s concerned,” said Burton.
The district already has had to deal with declining budgets by cutting positions.
“We feel we’re at the minimum we can be at,” Jacks said.
They may consider exploring the possibility of a new salary structure for hourly employees. The first wage increase is coming from a surplus. After June 31, they may have to dig into other assets.
“We probably would’ve used (the surplus) for something else,” Jacks said. “Now we’ll be using it for this.”
When the next big budget reviews start in January, administrators will analyze every penny in the budget.
“This is going to be at the top of our list,” Burton said.