Our company operates a number of public campgrounds and parks, including about 35 in Arizona. This is a letter I sent early this morning to the agencies we work with in Arizona
It appears that the ballot initiative for a higher Arizona minimum wage is going to pass, raising minimum wages as early as January, 2017 from $8.05 to $10.00. This is an increase of 24%, and comes on very short notice.
Currently, about half of our total costs are tied to wage rates (both payroll taxes and workers compensation insurance premiums are directly tied to wages and go up automatically by the same amount wages go up). Because of this, a 24% increase in wage rates will result in our costs going up on average by 12%.
It had been my intention to keep fees to customers flat in 2017, but that is now impossible in Arizona. This 12% expense increase is about twice the amount of profit we make -- there is no way we can absorb it without a fee increase. I apologize for the late notice, but I have never, ever had a minimum wage increase imposed on such short notice.
We will have to look at our financials for each permit, but my guess is that on average, we are talking about camping fee increases of $2 and day use fee increases of $1. This range of fee increases will actually not cover our full cost increase, but we will try to make up the rest with some reductions in employee hours.