From the Chamber Notebook:
A recent column by state Senate Minority Leader David Bradley paints a bleak picture of Arizona’s fiscal present and future.
It’s a surprising take not only because of Sen. Bradley’s typically sunny and optimistic disposition, but also in light of the current sunny and optimistic state of Arizona’s finances.
The Joint Legislative Budget Committee recently announced that the state’s Rainy Day Fund has eclipsed $1 billion, months ahead of schedule and without needing to implement previously planned installment payments. Irresponsibly crafted state budgets usually don’t have a record-sized emergency fund.
Economies will experience downturns, a fact from which Arizona isn’t immune. Global headwinds have economists speculating about a cooling economy on the horizon. But the state is in a far better position today than it was 10 years ago when a deep recession wiped out over 300,000 jobs and state revenues flat-lined. Today’s Arizona economy is more diversified, more resilient, and much better prepared to weather a storm.
We didn’t get here by luck. Legislatures and both the Brewer and Ducey administrations over the course of the last decade adopted policies that were laser-focused on attracting jobs and growing the economy. The Arizona Chamber was the leading voice in the business community in support of the three-pronged strategy that included tax rate reductions to spur investment, regulatory reform to ensure greater certainty for job creators, and civil justice reform to promote a pro-business legal environment.
The strategy worked. The criticism that there was no demand for the tax reductions for job creators that were phased in over several years is belied by the prosperity the state has experienced, ranking number 2 nationally in year-over-year job growth.
The strong economy hasn’t been at the expense of core government functions, either, including public education. The state budget that passed earlier this year implemented year-two of a three-year phase-in of a statewide average 20% pay raise for teachers, and it contained an accelerated restoration payment for recession-era cuts to District and Charter Additional Assistance, dollars that schools can use for a variety of reasons, including teacher pay.
I’ll concede that Sen. Bradley and I likely disagree over the proper size and role of government. But if government is going to deliver more services to more people, then it will need more revenues. Increased revenues come from a healthy, vibrant economy. We should continue to pursue economic policy that ensures Arizona remains atop the job-growth charts and can continue to meet its core governmental responsibilities, and not do anything reckless like last year’s proposal that would have doubled the income tax rate on small businesses.
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I had the pleasure to attend the annual meeting of the League of Arizona Cities and Towns. It was outstanding. The content was informative, the spirit was collegial, and the Tucson setting was picture perfect.
I was especially impressed by a panel discussion with border community mayors moderated by Mesa Mayor John Giles that featured Yuma Mayor Doug Nicholls and Douglas Mayor Robert Uribe.
The two mayors are not only great advocates for their own communities, but for the entire Arizona-Mexico border. They both discussed passionately why the border—and their communities’ proximity to it—is a tremendous asset. Despite an East Coast media that often portrays the border as a place with a diminished quality of life, Nicholls and Uribe can attest not only to all the positives the border has to offer, but that it’s also an area full of opportunity, it’s safe, and it has a bright future.
The border’s best days are ahead in large part because of the promise of USMCA, which the two mayors both support without hesitation. Mayor Uribe got it right when he called support for the agreement “a no-brainer.” (Mayor Giles of Mesa is a big supporter, too. His city is home to SkyBridge, a growing air logistics hub that can facilitate direct air shipments to Mexico without duplicative inspections at the destination.)
Gov. Doug Ducey is devoting tremendous energy to ensuring that USMCA passes; it’s too important to Arizona’s economy not to, and in the face of continued trade tensions with China, it’s too important to the health of the U.S. economy. The governor has great partners in Mayors Nicholls and Uribe and all of Arizona’s border mayors, who bring a needed on-the-ground perspective of the power of trade. Arizona’s congressional delegation would be wise to listen to them.
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Speaking of the League of Cities and Towns, congratulations are deserved for Tom Belshe, who will soon ascend to the post of executive director of the organization. Arizona’s business community looks forward to working with him.
We all want strong, effective leadership at all levels of government—state, county, and local. When a city pursues a policy agenda that makes things more difficult for job creators, it undermines not only the community’s competitiveness, but it harms the state’s reputation, and makes it more likely to invite a course correction from the state Legislature. The League has an essential role in communicating to its member cities the importance of being business-friendly.
Earlier this year, the Chamber named the Town of Gilbert, under the leadership of Mayor Jenn Daniels, the state’s best community to do business. We’re confident that with Tom’s assistance that more and more cities will be eligible for that award each year.
Glenn Hamer is president and CEO of the Arizona Chamber of Commerce and Industry.