Arizona U.S. Senators Kyrsten Sinema and Mark Kelly updated the business community on legislation important to industry and commerce Wednesday during the Arizona Chamber of Commerce & Industry’s annual 2021 Update from Capitol Hill.
The two senators detailed measures in the recent federal relief package that will benefit businesses in Arizona and priorities for the rest of 2021. They also fielded questions about top business concerns including corporate tax rates, preservation of the filibuster, and the feared Pro Act, which has been labeled “the worst bill in Congress” by many in the business community.
Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber in Washington, D.C., also offered an insider view into the goings on in the nation’s capital as far as business is concerned. More than 500 attended the virtual event, which was sponsored by Salt River Project and the Arizona Indian Gaming Association.
How businesses are benefiting from recent federal relief bill
Senator Sinema (D) talked about measures she has successfully supported and lobbied for in the federal relief packages including the most recent $1.9 trillion American Rescue Plan.
Sinema emphasized her record of working across the aisle despite criticism from party loyalists at times. For her, ensuring that Arizona employers and employees weather the pandemic is her first priority, not party politics, she said.
“Over the past year, employers have had to make tough choices, adapt, and contend with bureaucratic obstacles that delayed relief,” Sinema said. “That’s why as a member of the Senate bipartisan group on Covid relief, I listened closely to Arizona leaders and worked to ensure that the new relief law addresses Arizona’s urgent needs.”
Among the measures Sinema helped to pass are:
Restaurant relief fund: Sinema and Sen. Roger Wicker, R-Miss., introduced and helped pass a restaurant relief fund of $28.6 billion to help small and mid-sized restaurants, bars, caterers, food trucks, breweries and other food service providers in need of assistance with rent and operational expenses. It provides grants of up to $10 million per entity with a maximum of $5 million per location based on the difference between 2020 and 2019 revenue.
Save our Stages Act This legislation created a $15 million fund to provide relief to the entertainment industry like nightclubs, theaters and concert halls.
Employee Retention Tax Credit This is a refundable tax credit against certain employment taxes equal to 50 percent of the qualified wages an eligible employer paid to employees after March 12, 2020, and before January 1, 2021. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. Also, if the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS.
CHIPS for America Act Another bipartisan effort led by Sinema resulted in the CHIPS Act being adopted in December. The CHIPS Act — Creating Helpful Incentives to Produce Semiconductors — established federal grants to enable advanced research and development, secure the supply chain and ensure long-term national security and economic competitiveness.
Soon after Congress passed the act, Intel announced a $20 billion expansion of its manufacturing operation with two new factories in Arizona, Sinema said. The project is expected to create more than 3,000 permanent, high-wage jobs and more than 3,000 construction jobs, beginning this year.
Relief for border communities The measure provides $110 million to help border cities and towns overwhelmed trying to provide humanitarian aid to asylum seekers flooding across the border.
Looking ahead: immigration, infrastructure, broadband
Sen. Kelly, who stepped into public office in December, said he spent his first five months doing a “lot of listening” to ascertain what is the most effective use of federal dollars in Arizona. Protecting public health while encouraging economic development are top priorities.
“There’s a lot of work ahead to beat this virus and rebuild our economy. That’s been my focus,” said Kelly, who also spoke about his commitment to working in a bipartisan manner.
In the coming months, Kelly said he is focused on a number of packages with business in mind including:
Infrastructure Congress has failed to pass a major infrastructure bill in the past but there could be enough momentum to get it done this year. The bill would include funding for not only roads and bridges but water and wastewater facilities and the expansion of broadband to shrink the digital divide between the haves and the have nots.
Immigration reform Another top priority is to finally pass immigration reform to secure a future workforce for the state and provide a pathway to citizenship for longtime immigrant employees as well as Dreamers, young adults who were brought here as children by their undcoumented relatives.
Upgrades to ports of entry Keeping the border secure and expanding trade in Arizona will require investing in new technology and infrastructure at ports of entry, another key goal, Kelly said.
“The federal government is failing our state when it comes to border security,” Kelly said. “We need a secure, orderly and safe process at the border.”
Business worries: corporate taxes, filibuster, the PRO Act
U.S. Chamber executive Bradley rounded out the event by touching on a number of concerns to businesses.
One is the growing national debt from three massive Covid relief packages, topping $5 trillion. In order to accomplish an infrastructure package and other important projects, federal relief in the last round should have been more focused and targeted to real need, he said.
“When you think of last spring, we knew Congress had to provide broad based support. But what we’ve seen is not every family, every industry and every state needs relief,” Bradley said.
Bradley also talked about President Biden’s proposal to raise the corporate tax rate from 21 to 28 percent. He does not believe the measure has enough support to succeed, but if it does, it will risk the progress Arizona and the nation have made in becoming more globally competitive, he said.
Changing the corporate tax rate would likely reverse the successes that followed passage of the Tax Cuts and Jobs Act of 2017, he said. Prior to the Act, the nation had one of the highest corporate tax rates in the world. American companies were looking abroad for growth and new investment.
“Tax changes would give a leg up for competitors abroad. Why would we want to do that?” he said.
When asked about efforts by many Democrats in Congress to remove the filibuster, Bradley said that would likely hurt the nation, too. With strong division between the right and the left, the filibuster ensures that that congressional members have to work to find common ground, he said.
Another concern is the proposed PRO Act of 2021, which also does not appear to have strong support in Congress, Bradley said. The Act would force employees to pay union dues regardless of whether they support a union, threaten private ballots in union elections, and strip workers of their independent contractor classification.
It’s an issue that is extremely worrisome to Arizona businesses, said Garrick Taylor, interim president and CEO of the Arizona Chamber.
“This proposal is a litany of almost every failed idea from the past three decades of labor policy,” Taylor said. “It would undermine workers rights, most likely trap employers in a maze of labor disputes and force individuals to pay union dues regardless of their wishes.”