Arizona businesses foresee a bright economy in the year ahead but there still is much to be done to protect their interests, said advocacy groups that have released their public policy goals for 2019.
Water tops almost every list. Securing Colorado River supplies is a critical issue as Arizona faces its first water shortage, likely next year.
Protecting economic investment incentives and universities’ landholdings, maintaining low tax rates, training skilled labor, ratifying the new free trade agreement, and improving transportation and infrastructure are other top concerns.
As the state Legislature moves into action, here is a snapshot of public policy goals for 2019 from five groups: the Arizona Chamber of Commerce and Industry, Greater Phoenix Chamber, National Association of Industrial and Office Properties (NAIOP), the National Federation of Independent Businesses (NFIB), and Valley Partnership.
Arizona Chamber of Commerce and Industry
Certainty for Arizona’s water future is the most critical goal, President and CEO Glenn Hamer said.
“Our top priority for the first session of the 54th Legislature is to secure Arizona’s water future by adopting the Lower Basin Drought Contingency Plan (LBDCP),” said Hamer, referring to Arizona’s piece of a multi-state plan that details forcible measures to shore up Lake Mead and to cut water supplies when a shortage occurs.
“It is essential for Arizona’s existing economy, as well as our state’s future growth, that we protect Lake Mead from dropping to dangerously low levels,” Hamer said. “As my former boss, Sen. Jon Kyl would say, water is economic development.”
Other key goals:
Leave tax reforms in place Ensure Congress does not roll back tax reforms in the federal Tax Cuts and Jobs Act enacted in 2017 that made the U.S. more globally competitive with reduced corporate income tax and taxes for small businesses.
Career and technical education Support legislation for more funding for schools whose Career and Technical Education programs graduate high school students with credentials for in-demand fields.
Ratify the free trade pact Work to ensure Congress ratifies the United States-Mexico-Canada Agreement that is critical to Arizona’s relationship with its top trade partner, Mexico, and its top source of foreign direct investment employment, Canada.
Improve immigration laws Press Congress on immigration issues to make living and working in Arizona legal for “dreamers,” overhaul the visa system for a wide variety of industries, and enhance border security with improved staffing levels, technology and infrastructure.
The chamber has issued a comprehensive report that covers short and long term goals in 14 areas including economic development, education and workforce development, environment, health care, and transportation.
Greater Phoenix Chamber
Seeking resolution and clarity on key tax issues, sound budget practices, and the adoption of a drought contingency plan are among the goals in the Chamber’s 2019 Public Policy Guide to promote business health.
“As a core pillar of the Chamber’s mission, it is vital for business owners and entrepreneurs to have a strong voice in the regulatory process, not only to oppose measures that are bad for business but also to provide support to pro-business elected officials and policies,” said Jaime Molera, chairman of the public affairs team that worked with members to create the agenda.
The team identified three pivotal issues that need resolution during the upcoming session:
Balanced budget Maintaining a balanced budget that supports a fiscally responsible plan to fund vital state services including education and infrastructure and carry out the 20X2020 plan that gives teachers a 20 percent raise by 2020.
Tax clarity The business community needs clarity and conformity on key tax issues including:
Digital Goods and Services: The Chamber advocates for the modernization and clarity of Arizona’s tax code as it applies to digital goods and services so businesses can accurately comply with state regulation including defining which digital goods or services may be tax-exempt.
South Dakota vs. Wayfair decision: Lawmakers need to pass legislation that clarifies how Arizona’s Department of Revenue will be enacting the recent U.S. Supreme Court decision regarding the taxation of goods sold online.
Federal tax conformity: The business community seeks conformity to the federal tax code to provide clarity to Arizona’s tax professionals and related economic stakeholders.
Secure water supplies Lawmakers must pass a drought contingency plan that supports the users in the Greater Phoenix region and throughout the state.
National Association of Industrial and Office Properties
Economic development, maintaining competitive taxes and fees, and improving education are among the policy priorities for the state chapter of the NAIOP that acts as a voice for commercial real estate.
“In 2019 we intend to promote legislation that positions our state to be the preferred choice for corporate locations and expansions,” said Arizona President and CEO Suzanne Kinney.
Clarifying tax laws is also important, she said.
“NAIOP Arizona will support state legislation to clarify and limit the circumstances under which a city may levy the speculative builder tax. The current application of the law lacks certainty for building owners and developers and provides a disincentive for redevelopment.”
Other goals are:
Keep taxes in check Oppose legislation that could increase taxes, fees and regulations for the commercial real estate industry to keep Arizona economically competitive.
Economic development tools Maintain existing economic development tools that help create jobs and contribute to regional economic growth.
University landholdings Monitor legislative proposals that could impact how state universities use their property in real estate development projects and continue to support those projects that benefit the greater community.
Promote career education Work with the business community to find sustainable funding solutions to advance educational outcomes and support Career and Technical Education (CTE) and apprenticeship programs.
Modernize infrastructure Support modernization of transportation infrastructure and work with the Arizona Commerce Authority to promote private investment in federally-qualified Opportunity Zones.
National Federation of Independent Business
“Finding qualified workers is small businesses’ top problem going into 2019,” said Chad Heinrich, Arizona State Director. “The idea of universal recognition for all out-of-state occupational licenses could be an important component to growing Arizona’s available workforce.”Competitive tax laws, removal of excessive regulation, and a qualified workforce are at the top of the list for the NFIB.
Other goals include:
Remove red tape Continue eliminating unneeded and outdated government regulations. Saving taxpayer dollars by consolidating agencies and offices while challenging the Legislature to repeal unneeded laws to assist small businesses.
Budget responsibly Rather than going on a spending spree with the budget surplus, committing dollars to the rainy-day fund is prudent, knowing that the economy could be in a late stage of expansion.
Protect taxpayers NFIB strongly lobbied Congress in support of the federal Tax Cuts and Jobs Act. Arizona needs to follow through, conform with the federal law and hold taxpayers harmless from tax increases due to conformity with the federal changes.
Valley Partnership
Water issues take precedence for this long-standing organization that advocates on behalf of commercial, industrial and residential real estate development.
Protecting Lake Mead with passage of the DCP is the No. 1 priority, said Cheryl Lombard, President and CEO.
Goals include:
Secure groundwater supplies Supports measures like the recent $97.5-million, 25-year agreement that allows home builders to buy water from the Gila River Indian Community Tribe to ensure supplies for the future. The deal is contingent on passage of the drought contingency plan.
Rio Reimagined Promote Rio Reimagined, a Valley-wide effort to bring development and recreation along the banks of the Salt River that cuts across Maricopa County.
University landholdings Ensure the ability of the state’s universities to maximize use of their landholdings including working to promote legislation to that effect.
Reasonable water rules Ensure that federal rules governing floodplain and dry washes and Waters of the United States (WOTUS) do not disproportionately impact development industry.
Protect economic tools Protecting authority for the use of existing economic development tools including the Government Property Lease Excise Tax that provides tax incentives to stimulate development in commercial areas and Community Facilities Districts that finance infrastructure projects.
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