FILE - Flagstaff, Arizona

Route 66 in Flagstaff, Arizona

Flagstaff's higher minimum wage means the city could owe the state of Arizona more than $840,000 over two years to offset the state's higher costs for doing business there.

The numbers are preliminary and could change.

Arizona’s minimum wage is $12 an hour. But Flagstaff’s minimum wage is now $13, on its way to $15.50 by 2022.

Lawmakers in 2019 passed legislation that requires municipalities with a higher minimum wage to reimburse the state for the higher costs incurred because of the higher minimum. The measure was in response to Flagstaff's higher minimim wage and meant to deter other cities from doing the same.

According to the Arizona Daily Sun, Flagstaff owes the state an estimated $202,700 for this fiscal year and an estimated $640,889 next fiscal year.

If Flagstaff declines to pay, the state can withhold the amount in question from state revenues that are diverted to local governments.