Arizona’s economy dodges potential $9.5 billion setback, study finds

Arizona’s economic environment could have been significantly less competitive had several legislative proposals been enacted this year, according to a joint report by the Common Sense Institute (CSI) Arizona and the Arizona Chamber Foundation.

The study examined 67 legislative proposals from the 2023 session, dubbed “job killer” bills for their potential negative impact on employment. If passed, these proposals could have resulted in a $9.5 billion setback to Arizona’s economy and a loss of approximately 114,000 jobs.

Included in these proposals were over a dozen bills that, while failing to pass in Arizona, have been enacted in neighboring Colorado. The study also highlighted that these bills could have levied over $25 billion in new annual costs on businesses operating in Arizona per year, including an estimated $15 billion in additional taxes and fees.

Some of the key legislative proposals included 10 bills proposing to increase taxes and one seeking to repeal Arizona’s status as a right-to-work state, which makes union membership voluntary. 

The tax increase bills alone, had they passed, could have resulted in an additional $15 billion in new taxes. The proposed repeal of the right-to-work law was estimated to cost Arizona another $18.6 billion.

The report also indicated a comparison between Arizona and Colorado’s employment trends since 2019, taking into account the impacts of the COVID-19 pandemic. According to the study, had Arizona followed Colorado’s example, it would be grappling with 113,500 fewer workers today, and its economy would have shrunk by 2.6% — equivalent to a $9.5 billion loss in GDP.

CSI Arizona Executive Director Katie Ratlief said the report will inform lawmakers from both parties about the potential consequences of their proposals. 

“Policymakers and the public should be informed about the short- and long-term impacts these pieces of legislation have so they can weigh pros and cons and make informed decisions,” she said. 

Danny Seiden, president and CEO of the Arizona Chamber of Commerce & Industry and a CSI board member, said the report should figures into future legislation.

“This analysis provides important data points for legislators to consider as these failed bills will likely resurface in future sessions,” said Seiden.

The study underscores the importance of continual legislative scrutiny and careful decision-making to maintain the health of Arizona’s economy. While these legislative proposals did not pass, they illustrate the potential for rapid policy shifts and the profound economic impacts such changes could inflict.

Michael Kittilson

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