Leaders from chambers of commerce across Arizona came together Monday night in a “tele-townhall” conducted via video conference to hear from the campaign to defeat Proposition 208 and from renowned Arizona economist Elliott Pollack.
Pollack, who has served as co-editor of the Arizona and Greater Phoenix Blue Chip economic forecasts published by Arizona State University’s Economic Outlook Center, told the audience that the tax initiative to raise the state’s top income tax rate by 77.7% would have grave consequences for the state’s future.
“For the first time in the 50 years I’ve been a practicing economist in Arizona, it would do something that would hurt economic development in the short- and long-run,” Pollack said. “This is a disaster waiting to happen.”
If passed, the tax increase initiative would result in Arizona having the country’s ninth-highest income tax rate, only to be exceeded by economic poor performers like California, New York, and New Jersey, which Pollack said are “all economic disasters. And it’s not a coincidence they’re all economic disasters.”
Pollack says high-tax states give the wrong incentives, shedding people and jobs.
Terri Kimble, the president and CEO of the Chandler Chamber of Commerce, agreed, saying Proposition 208 sends the wrong message to businesses attempting to recruit new talent to Arizona. She cited attracting top-notch health care and manufacturing professionals as an example.
“If Arizona’s going to continue to lead the healthcare industry and some of the healthcare networks that we have, this is going to be huge,” Kimble said. “And we also see that in the manufacturing sector as well.”
Kimble said her chamber is especially concerned about the impact on small businesses, which would bear the brunt of the tax increase, a sentiment shared by her counterpart at the Tucson Metro Chamber, Amber Smith.
“Recovering from COVID-19 and your business trying to survive during this time, here is one more obstacle in trying to survive,” Smith said. “That is really what is most worrisome for these companies is that they are looking at trying to survive next week. How can they survive this for next year?”
All the speakers at the meeting convened by the Greater Phoenix Chamber and the Arizona Chamber Executives agreed that they view adequate education funding as essential to the state’s continued economic development, but that Proposition 208 risks far more harm than good.
“This is not about not funding education,” economist Pollack said. “This is about finding the right way to fund education, and this is the wrong way.”
“We view education as an economic development tool to attract high quality companies here,” Kimble said.
Smith, the president and CEO of the Tucson Metro Chamber, concurred.
“Our ‘no’ vote on this is not because we don’t believe in funding education,” she said. “In fact, it’s because we believe in funding education why we are against this.” Smith said the economic harm that would result from the tax increase would jeopardize the future revenues necessary to fund education.
Todd Sanders, the president and CEO of the Greater Phoenix Chamber, who served as the meeting host and moderator, asked his counterpart at the Arizona Chamber of Commerce & Industry, Glenn Hamer, to respond to criticism that the business community has failed to support education funding.
“It’s a phony baloney sandwich,” Hamer said, citing the numerous legislative funding initiatives and ballot referrals his and other business groups have supported to increase education funding and improve academic outcomes. “It is a false comment to say that the business community hasn’t supported more dollars into our K-12 system—we have.”
The chairman of the effort to defeat Proposition 208, Jaime Molera, who also chairs the Greater Phoenix Chamber’s Education & Workforce Development and Public Affairs committees and served as the state superintendent of public instruction and twice as president of the state Board of Education, said he is heartened by his campaign’s broad coalition and urged everyone to vote no.
“You have just a wide array of Arizona businesses that have come together to say, ‘This is not a reasonable plan for education. It’s a horrid plan for our education system, but it’s even worse for our economy.’”