This column by Arizona Chamber President and CEO Danny Seiden originally appeared in the Arizona Capitol Times.
The state Supreme Court has ruled that the historic income tax reduction passed by the Legislature and signed by Gov. Ducey last year will not be referred to the November ballot.
That means Arizona is on its way to having a simple, low, fair and flat state income tax of 2.5% –the lowest in the nation. But it’s worth remembering how we got to this point. In 2014, Arizona was fighting to emerge from the Great Recession, hit harder than almost every state in the country. We were staring down a billion-dollar budget deficit.
I was on the campaign trail for then-candidate Doug Ducey when he made a pledge that, to many, may have sounded like a pipe dream – as governor, he would make Arizona the No. 1 state to live, work, and start and run a business – all while reducing the state income tax to as close to zero as possible.
Skeptics mocked the idea, believing it wasn’t possible. Opponents called instead for higher taxes, claiming his plan would bankrupt Arizona. Cynics, perhaps disillusioned by years of empty promises, assumed they were being fed another speech by an ambitious politician who’d say anything to get elected. All stump, no substance.
Undeterred, Governor Ducey was elected – not once, but twice – and he has been delivering on those promises since Day One. I’ve known our governor a long time. And if there’s one thing you should know, it’s that his administration is about results – not rhetoric. And the results speak for themselves.
Fast forward to today. Arizona has dug itself out of a $1 billion hole, and now sits on a record $5 billion surplus. Our economy is booming. Our population is growing. Since taking office, Arizona has welcomed 18,000 new businesses and over half-a-million new residents. We’ve created almost 400,000 new jobs and recovered those lost during the pandemic faster than nearly every other state. Our 3.3% unemployment rate, better than the national average, represents a historic low not seen in over 45 years.
All of this, while pumping record investments into K-12 education, supporting vital infrastructure needs, and funding core priorities like public safety, health care and more. All of this, while cutting taxes every year and advancing pro-growth policies that have made our state among the most competitive in the nation.
None of this was by accident. The current circumstances reflect 7-plus years of good policy and relentless salesmanship by a leader who had a strong vision for what our economy could be. And as for that campaign promise? Last session, Governor Ducey championed and signed into law a historic tax reform package that slashed rates for every Arizona taxpayer and implemented a 2.5% flat rate – the lowest among all other states with an income tax.
The fate of that plan hung in limbo over recent months, as opponents attempted to overturn it via a voter referendum. Thankfully, the Arizona Supreme Court blocked those efforts, rightfully recognizing our Constitution does not allow for the referral of tax measures that impact the “support and maintenance” of state government.
This would be a win for Arizona taxpayers and small businesses under any circumstance, never mind during this period of unprecedented inflation. This decision provides relief for every Arizonan who finds themselves spending more than ever before to fill up their cars, put food on the table, and shelter and clothe their families – and yes, that’s every Arizonan. It also provides the much-needed certainty that Arizona will have the lowest flat-tax rate in the nation – keeping our business environment among the most attractive and competitive for job creators and ensuring the continued long-term economic growth of our state.
We’re grateful to Governor Ducey and the state Legislature for delivering on a promise that Arizonans can take to the bank.
Danny Seiden is president and CEO of the Arizona Chamber of Commerce and Industry.