A new released by the CATO Institute ranking American governors according to their fiscal performance gave Arizona Gov. Doug Ducey an “A.” Only four other governors earned an A. Arizona’s passage of the lowest flat personal income tax rate in the nation in addition to the increase of the Rainy Day Fund under Ducey’s leadership contributed to his high marks.

The other governors receiving an A rating were Kim Reynolds of Iowa, Chris Sununu of New Hampshire, Pete Ricketts of Nebraska, and Brad Little of Idaho.

Arizona’s economy was damaged by the pandemic, but it quickly recovered as a result of tax reforms and wise budgeting implemented by the Ducey administration, according to the report.

Historic tax reform

The historic 2.5% flat tax that Ducey and legislative Republicans spearheaded was supposed to take effect in January 2024, but due to the state economy’s robust performance, the new rate will now take effect in January 2023. 

In a September 29 to Arizona Department of Revenue Director Robert Woods, Ducey said that an influx of workers, a $1 billion-plus Rainy Day Fund balance, and wise budget management, has enabled the state government to transition to the new rate earlier than expected.

“It’s time to deliver lasting tax relief to Arizona families and small businesses so they can keep more of their hard-earned money,” the governor wrote. 

Ducey was one of 16 governors in 2021 and 2022 to sign into law reductions to top individual income tax rates.

Ducey and the Legislature also reduced the commercial property tax assessment ratio, helping to ensure the state’s continued economic competitiveness and reducing the disparity in the property tax burdens borne by commercial property taxpayers versus homeowners.

Americans have taken notice, vaulting Arizona into the ranks of states with high rates of inbound migration. 

Rich States Poor States, an annual publication by the American Legislative Exchange Council that the latest movements in states’ economic growth and competition, ranks Arizona 3^rd in 2022 compared to 13^th in the year 2021.

Ducey has focused on pursuing growth and responsible spending throughout his eight years in office. The FY 2023 budget, which he into law in June, appropriated additional funds for K-12 education, investments in water conservation and augmentation, and public safety. 

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Arizona Gov. Doug Ducey was in Tucson last week to tour the Arizona supersonic wind tunnel with UArizona President Bobby Robbins, Raytheon Missiles and Defense President Wes Kremer, and several members of the university’s Aerospace and Mechanical Engineering program. The governor also participated in a roundtable on workforce development.

Visiting southern Arizona for the 93rd time since taking office in January 2015, Ducey stressed the importance of the state’s robust university system and innovative job creators in forging a competitive economy.

“Educators and workforce leaders across the state do incredible work to help Arizonans find meaningful work and ensure our small businesses can succeed,” Ducey .

UArizona’s supersonic wind tunnel project is set to benefit from a $3.5 million investment in the fiscal year 2022 state budget proposal, improving wind tunnel infrastructure and expanding the ability of students to interact with and work on the wind tunnel.

“I would think not only what we’re seeing is critical to the future of our economy, it’s critical to the future of our national defense,” Ducey .

The supersonic wind tunnel is to test “how hypersonic technologies respond under specific conditions, such as speeds and attacks.”

UArizona is working with Raytheon to advance the project.

Following his tour of UArizona’s campus, Gov. Ducey led a roundtable on workforce development alongside key stakeholders. In addition to Robbins and Kremer, attendees included:

• Dr. David Hahn, Craig M. Berge Dean, UArizona’s College of Engineering;
• Ted Maxwell, President of the Southern Arizona Leadership Council; 
• Kathy Prather, Superintendent and CEO of Pima JTED; 
• Lee Lambert, Chancellor of Pima Community College; 
• Steve Holmes, Superintendent of Sunnyside Unified School District;
• Kate Hoffman, Founder and CEO of Earn to Learn.

The group discussed how the state government, local governments, public-private partnerships, universities, and the private sector could collaborate to expand career opportunities in the state. Gov. Ducey made supporting small businesses a priority.

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Leaders in the field of manufacturing from across the state gathered at the Arizona Biltmore last Thursday for the Arizona Manufacturers Council’s Awards and Summit event. The event featured panel discussions and guest speakers from the industry and culminated with the Manufacturer of the Year awards ceremony recognizing those companies that have made significant positive contributions to the manufacturing and the broader state economy. 

In his opening remarks, AMC Chairman Mark Gaspers congratulated the companies represented at the event for their resiliency during the pandemic and highlighted recent significant investments, including by Intel, which is in the midst of a $20 billion expansion in Chandler.

Workforce development in focus

A panel on the state’s manufacturing sector workforce featured Darcy Renfro, the chief workforce and economic development officer for Maricopa County Community College District; Kolu Wilson, workforce program deputy administrator for the Arizona Office of Economic Opportunity; Dave Garfano, executive director of the Arizona Manufacturing Extension Partnership; and was moderated by Dawn Grove, general counsel at Karsten Manufacturing and the past chair of the Arizona С��ñֱ��app of Commerce & Industry and previous chair of the AMC.

The main focus of the panel was the work that various businesses and community colleges were putting in to prepare young people for the workforce. One such example is , a program at Central Arizona College that trains prospective workers for hands-on manufacturing jobs with a special focus on advanced automotive manufacturing, which is essential for the new Lucid electric vehicle plant in Casa Grande.

The panelists were in agreement that there are many programs for both workers and businesses to take advantage of to obtain additional training and recruit new skilled workers. 

Sober assessment from U.S. Rep. David Schweikert

Arizona С��ñֱ��app President and CEO Danny Seiden interviewed Arizona United States Rep. David Schweikert, who spoke about the activity on Capitol Hill surrounding President Joe Biden’s attempts to pass both a bipartisan infrastructure bill and a multi-trillion-dollar social spending package known as Build Back Better, which contains a litany of tax increases that would harm job creators. 

Schweikert also urged businesses to become more involved in the issues that are pertinent to their success saying that he’s concerned “business has lost its voice.” 

Schweikert hit an optimistic tone, however, on the rate of life changing innovations hitting the market.  He spoke about the possibility of a cure for Type 2 diabetes in the near future saying that it “could be the best thing our society does.” 

Gov. Ducey touts economic achievements

Arizona Gov. Doug Ducey closed out the summit portion of the program. “We’ve run a marathon in our state,” Ducey said referring to Arizona’s experience in the pandemic. 

The governor said the economy is rebounding to a point where it’s surpassing the pre-Covid economy. 

Ducey took the opportunity to remind the audience of the things that set Arizona apart from other states. He touted his administration’s work to push back against “anti-growth policies” that slow economic growth. Arizona, he said, can go toe-to-toe with other states such as Texas and Colorado in winning new job investments. 

The event concluded with an awards ceremony that honored state businesses and leaders for everything from innovation and sustainability to economic contributions. The honorees were: 

• 2021 Advocate of the Year: of the Arizona Rock Products Association and the Arizona Mining Association
• 2021 Legislator of the Year:
• 2021 Excellence in Innovation Award:  
• 2021 Excellence in Sustainability Award: 
• 2021 Small Manufacturer of the Year:
• 2021 Medium Manufacturer of the Year:  
• 2021 Large Manufacturer of the Year:  
• 2021 Economic Driver:  

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As Arizona recovers from the pandemic, thousands of employers are ramping up hiring across the state and job growth is projected to remain steady for years to come. A new report projects more than a half million new jobs by 2029.   

Some sectors, however, are finding it challenging to fill jobs right now. As of March, there were 160,000 to 180,000 jobs open across the state, according to the U.S. Bureau of Labor Statistics. But unemployment is 6.7 percent, above the national average of 6.2 percent.��

To address the dilemma, Ducey announced he is ending the use of federal relief money for extra unemployment payments on July 10. Instead, the money will be used for the new incentives.  

“In Arizona, we’re going to use federal money to encourage people to work instead of paying people not to work,” Ducey said last week.

Federal relief dollars will be used for the new “Arizona Back to Work” program that will offer incentives to get workers back on the job and grants to help childcare providers retain employees.  

Here are the new “Back-to-Work” incentives 

Under the program, Arizona will offer one-time bonuses to returning workers, along with child care support, educational scholarships and rental assistance. 

Here’s a breakdown of the incentives:

Return-to-work bonuses

Arizona will set aside $300 million of federal resources to offer a one-time bonus of $2,000 to eligible individuals who return to the workforce and get a full-time job. Those who return part-time will receive $1,000. The bonus will be awarded when the individual has left the unemployment insurance program and completed at least 10 weeks of work with an employer. 

The program will be offered on a first-come, first-serve basis. In order to qualify for the bonus, an individual must have already filed for unemployment benefits. Arizonans filing for new unemployment benefits moving forward will not be eligible for return-to-work bonuses.

Education Incentives

Arizona will provide $7.5 million for community college scholarships for currently unemployed workers who are eligible for the return-to-work bonuses, as well as $6 million for GED test preparation and exam fees for eligible workers without a high school diploma.

Child care for returning workers

The state will provide three months of child care assistance for individuals with children who return to work after collecting unemployment benefits. To be eligible, an individual must have already filed for unemployment benefits and earn $25 per hour, equivalent to a yearly salary of $52,000, or less at their new job.

Housing Assistance

The Governor on May 5 announced significant new federal investment of $508.4 million aimed at addressing . The funds will assist renters, support homeowners experiencing financial hardship, and provide critical services to Arizonans experiencing homelessness or housing instability.

Funding assistance to recruit and retain child care employees

Additionally, Gov. Ducey and DES last week announced an additional for childcare providers across the state. With this funding, Arizona will have allocated a total of $88 million in Child Care and Development Fund relief funding for the child care network, providers and families since the beginning of the pandemic, as appropriated through the 2020 CARES Act.

The grant program provides immediate support to child care providers in hiring qualified staff and retaining existing staff. This grant program will help all regulated child care providers with recruitment and retention costs to support the child care workforce in Arizona. 

Child care centers and group homes must use grant funds for salaries and benefits for employees, and bonus incentives for hiring and retention.��

Arizona projected to add more than half million jobs by 2029 

Jobs are projected to continue to grow at a steady rate through 2029, according to a new report out of the Arizona , a division of the Arizona Commerce Authority responsible for economic forecasting. 

According to the OEO report, Arizona will add nearly 550,000 jobs from 2019 to 2029 for an annualized job growth rate of 1.6 percent, four times the U.S. growth rate.

Fastest growth projected for these sectors  

Sectors projected to see the highest gains in job creation include education and health services, construction and professional and business services, according to data compiled by the OEO. 

Arizona already is experiencing an explosion of advanced manufacturing in industries like semiconductors and electric vehicles. 

Last year, Taiwan Semiconductor Manufacturing Company announced the addition of 1,600 jobs and construction of a new semiconductor fabrication facility in Phoenix.

In March, Intel announced adding 3,000 jobs along with two new semiconductor fabs in Chandler. Intel’s $20 billion investment represents the largest private sector investment in state history.

Electric and alternative fuel vehicle companies like Lucid, Nikola, and ElectraMeccanica, which have manufacturing facilities in the state, are projected to add thousands of jobs in coming years. That means more jobs for suppliers and support industries as well.

“Arizona has become a jobs magnet,” Ducey said. “Not only are jobs booming, wages are rising faster at one of the fastest rates in the country. Our recovery is moving forward and there is more opportunity before us than ever before.”

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Businesses and community leaders in Arizona’s historic “Copper Corridor” are calling foul on the U.S. Department of Agriculture (USDA) for its recent decision to rescind an important step toward completion of a land swap that is essential to the development of the mine. 

At stake are thousands of jobs in the struggling region, said Superior Mayor Mila Besich, who is trying to get the word out about how important the Resolution Copper Project is to the mining region.  

Besich said the unexpected setback came after years of negotiating in good faith with all concerned parties to address environmental and other community concerns. The copper mine, which has been working for almost a decade to get all permits in place, is projected to employ 3,700 workers and generate more than $1 billion in annual economic benefit when fully operational.  

“When the Resolution Copper project was introduced to Superior, it brought a glimmer of hope and opportunity to our small, close-knit community. Its predecessor, the Magma Mine, was shuttered in 1996 and opportunities were scarce for Superior to provide employment and business prospects for our diminishing population,” said Besich in a recent editorial in the .

“Arizona’s Copper Corridor is the equivalent of Yukon gold. Some of the richest and most accessible copper ore deposits are found here in eastern Pinal and southern Gila counties. Two of the three copper smelters left in the United States operate in our region,” said Besich, who also serves as executive director of the Copper Corridor Economic Development Coalition, a  region-wide private-public partnership to advance the economic and community development of Arizona’s mining country.

Huge global need for copper 

Having a steady home-grown copper supply will be a competitive advantage for U.S. manufacturing companies, said business and economic development groups who have worked through the process. Arizona stands to benefit tremendously. 

The mine will be one of the largest producers in the country. Copper is an essential component in mobile devices, medical equipment and clean energy technologies, and demand is growing worldwide. The World Bank estimates global copper demand could rise by 200 percent by 2050. 

“Mining belongs in this part of Arizona and it can be done responsibly while protecting the environment and the beautiful landscape that we love and cherish,” Besich said. 

Years of negotiation shot down under new administration 

At issue is a involving the Oak Flat area, which is considered sacred to tribes in the Southwest. To alleviate those concerns, the mine underwent seven years of negotiations with the tribes to put into place measures everyone could live with, Resolution Copper officials said. 

Several changes were made to the project as a result, including permanent protection of natural features of the Apache Leap cultural and recreational area and a partnership to protect Emory oak tree groves in the area. 

The land exchange legislation allows for the exchange of 2,422 acres of land above the copper deposit for 5,459 acres of Arizona land owned by Resolution Copper that will become public land.

In January, the mine was notified that the U.S. Forest Service the land swap in its final environmental impact statement. A 45-day review was to follow. But when President Joe Biden took office, the USDA announced it was rescinding the environmental impact statement, halting the objection phase, and revoking the land swap. 

USDA wants another “thorough review”

In a , the USDA said it is requiring the project go through another “thorough review” with all parties involved because of a new Presidential Memorandum involving tribal relationships. The memorandum refers to ensuring that the Forest Service “has complied with the environmental, cultural, and archaeological analyses required,” the USDA stated. 

But company officials said they already have engaged all parties “every step of the way.”

The Forest Service, the lead agency charged with overseeing the federal approval process, spent nearly a decade gathering insights from local leaders, Native American tribes, NGOs, community organizations and businesses, company officials said.  

“Simultaneously, Resolution Copper participated in hundreds of other conversations and engagements, including numerous community working groups, to collect the input that continues to shape the project,” the company said in a prepared statement. 

Voices in support of Resolution Copper 

Business and community leaders including Governor Doug Ducey have issued public statements protesting the action. Here are some of their voices:  

Gov. Doug Ducey

“I am extremely disappointed in the Administration’s decision to cease progress on Arizona’s Resolution Copper project, which is set to grow jobs and is estimated to create a direct and indirect economic impact of more than $1 billion to Arizona’s economy every year,” Ducey . 

“An effective and predictable regulatory environment is a critical factor in Arizona’s booming economy. In Arizona, we follow what works. Undoing lengthy, comprehensive, and already-completed federal environmental studies on a whim with the changing of federal administrations doesn’t work. This type of activity threatens an untold number of major projects in Arizona and around the country.”

Pete Rios, former vice chair, Pinal County Board of Supervisors

“As Pinal County District 1 supervisor and a native to the Hayden-Winkelman area, I am extremely familiar with copper mining — both the opportunity it represents and its legacy,” . “I know the Resolution Copper project and the enormous opportunities a project like this can unlock for Pinal County. I think you’ll agree, as I do, that Resolution Copper is good for Arizona and good for the people of Pinal County.”

Garrick Taylor, interim president, Arizona С��ñֱ��app of Commerce and Industry

“The Forest Service conducted its work with transparency and with a genuine commitment to public engagement. This will be a tremendous job creator. Not only will Resolution Copper be a major employer, but it will lead to construction activities and new commercial development such as housing, hotels and retail. What’s more, we know from the Environmental Impact Statement that it will be a safe, environmentally responsible project that will help meet the ever-growing demand for copper.”

Jacob Evenson, Boilermakers Local 627, business manager

“Throughout this process, Resolution Copper consulted with multiple tribal nations throughout the state of Arizona. Hundreds of our Boilermakers that are also tribal members have been at the table helping shape the vision of the Resolution Copper mine. To have a clean energy revolution, we need copper to power our windmills, move electric cars, and operate solar panels. We demand the USDA reissue the Final Environmental Impact Statement without delay and continue progress towards construction.”

Mike Oddonetto, Oddonetto Construction, Inc., Globe

“Resolution Copper has been an important source of business for my firm over the past year, enabling us to expand our own , and I look forward to continuing to work with the company to grow our business.”

Rich Nolan, president, National Mining Association  

“The mining industry stands ready to support the Biden administration’s aggressive plans for electrification and modernizing our nation’s electric grid – actions that will require massive amounts of copper and other mined materials – but it is imperative that our permitting processes proceed in a timely manner to support those goals.”

By the numbers: new jobs, tax revenues, industry 

Resolution Copper is considered one of the most significant private investments in Arizona history, developing one of the world’s largest untapped copper deposits in Arizona’s Copper Triangle. 

Economic impact studies show that once in operation, the mine would:

• Supply up to one-quarter of the nation’s copper demand and produce up to $61 billion in economic value for Arizona over the 60-year life of the project.

• Create approximately 3,700 jobs with 1,500 direct employees and 2,200 indirect and induced jobs. Employees will be paid approximately $134 million in wages and benefits per year. Approximately 600 employees and contractors are already on site. 

• Generate between $88 to $113 million in state and local tax revenue each year. An additional $546 million will be spent annually in goods and services from local businesses.

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A bill advancing through both houses of the Arizona Legislature aims to clarify that state lawmakers, not utility regulators, have the authority to determine what clean energy goals are best for the state. 

The body that regulates utilities, the Arizona Corporation Commission (ACC), voted 3-2 to remain neutral on the issue for now. 

Meanwhile, the legislation has stirred debate statewide over who has constitutional authority to establish the standards. Hundreds of individuals and organizations have lined up on both sides. 

Ultimately, the Arizona Supreme Court may have to decide where the true power lies.

Question over constitutionality 

Gov. Doug Ducey and state lawmakers who favor legislative control believe the Commission overstepped its constitutional authority in setting renewable energy goals years ago for regulated utilities like Arizona Public Service (APS) and Tucson Electric Power (TEP). 

“I want to see the Corporation Commission setting rates and I want to see the state Legislature setting energy policy and I hope we can straighten that out this legislative session,” Ducey said during the Arizona С��ñֱ��app of Commerce and Industry’s 2021 Legislative Forecast Luncheon last month. 

Debate started after ACC ramped up energy goals

The recent showdown came after the ACC approved a proposal in November to ramp up clean energy and renewable energy requirements even though large utilities like Arizona Public Service and Tucson Electric Power have been working to meet clean energy goals, investing  hundreds of millions of dollars in infrastructure like solar energy plants and wind farms. 

Several legislators then introduced two mirror bills, and House Bill 2248, to cement their authority over energy policy. 

Sen. Sine Kerr, R-Buckeye, one of the sponsors, stated at a January hearing last month that ACC is authorized by the constitution to regulate customer utility rates, not set energy policy.  Kerr said the state constitution clearly defines the commission’s “intended function.” 

“That is, exercising ratemaking authority to protect captive consumers against corporate abuse, while restoring the Legislature’s paramount authority to regulate public health, safety and welfare as recently affirmed by the Arizona Supreme Court,” she said.  

Kerr was referring to the court’s ruling in another case involving the takeover of the trouble-plagued Johnson Utilities in San Tan Valley. In that case, the court acknowledged that the state Legislature and the ACC share authority on issues of public health such as clean air and water, but that the Legislature has the final say. 

What does the legislation do? 

The measure would prohibit the Corporation Commission from “adopting or enforcing a policy, decision or rule that directly or indirectly regulates the types of critical electric generation resources used or acquired by public service corporations within this state’s energy grid without express legislative authorization.” 

It also would prohibit any new mandates beyond current standards that were set by the ACC in 2006. Those standards require regulated utilities to obtain 15 percent of their energy from renewables like solar, wind and hydro power by 2025. 

In November, the ACC voted 4-1 to adjust those rules to require utilities to get half of their energy from renewable sources by 2035 and 100 percent from clean energy, including nuclear, by 2050.  

Commission votes to take “wait-and-see” stance

Last month, the commission voted 3-2 to remain neutral on the bills as they make their way through the House and Senate. 

Commission Chair Lea Márquez Peterson stated at the hearing that the vote was not necessarily meant to secede power to the Legislature, but was merely a wait-and-see move to start communicating with state lawmakers as the measures move forward. 

Both bills have now passed through all committees at the Legislature and await approval on the full Senate and House floors before going to the Governor’s office for his signature. 

For and against 

Opponents of the measure have said they are concerned that  the legislation could derail efforts to reduce carbon emissions in the state. Proponents believe the state Legislature has constitutional authority to make policy decisions that impact the health of citizens. 

Among the groups supporting the legislation are Americans for Prosperity Arizona, Free Enterprise Club, Goldwater Institute for Public Policy Research, Homebuilders Association of Central Arizona, Market Freedom Alliance, and Republican Liberty Caucus of Arizona.

Among the opposition are the American Lung Association, Arizona Public Interest Research Group, Business for Water Stewardship, Environmental Defense Action Fund, Sierra Club, and Southwest Energy Efficiency Project, Western Resource Advocates, and Wildfire: Igniting Community Action To End Poverty In Arizona.

Voting along party lines 

State lawmakers are lined up along party lines on the issue with Republicans — who hold the majority — in favor of the two bills and Democrats opposed. 

At the Corporation Commission, Republican commissioners Márquez Peterson, Justin Olson and Jim O’Connor voted in favor of maintaining a neutral stance with Olson stating that he fully supports the legislation. 

“Quite frankly, I’m supportive of the objective of this bill and that is to make it clear that the state Legislature, governor and executive branch have that responsibility of establishing policies for public health,” he said.

Democrats Sandra Kennedy and Anna Tovar voted against the measure, accusing the Legislature of a “power grab.”

“I am pretty saddened today,” Kennedy said after the vote. “We have taken an oath of office to uphold the Constitution. Clearly, this is unconstitutional.”

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State budget analysts brought heartening news to citizens, businesses and schools in the governor’s proposed budget for fiscal 2022. 

First and foremost, there will not be a budget deficit as predicted earlier this year when the pandemic caused a spike in unemployment and disruptions to commerce statewide.

Governor Doug Ducey also wants income tax cuts amounting to $600 million over the next three years, state budget analysts said during a press conference revealing the proposed budget on Friday. 

In fact, Arizona is doing so well, revenues are projected to provide a healthy surplus. Arizona’s healthy economic standing means there will be $389 million to help students who have suffered pandemic-induced learning losses to catch up.

“Arizona is resilient, and we continue to move forward in the face of hardship, loss and disruption,” Governor Doug Ducey said. “Our budget will keep us moving in the right direction, and it makes strategic investments in our greatest areas of need — K-12 education, forestry management, public health and much more.

“Kids have missed out on important learning opportunities and classroom time, and we need to use our resources to help students in need catch up and ensure students, regardless of background, stay on the path to success.”

Keeping Arizona competitive on world stage

The governor’s plan includes funding for education and school choice,  workforce training, wildfire prevention, high speed internet for rural areas, covid relief for businesses and healthcare providers, highway and prison infrastructure, and much more. 

To keep Arizona competitive on the world stage, the budget calls for $600 million in cuts to income taxes “across the board” for citizens and small businesses over the next three years. 

Business groups including the Greater Phoenix С��ñֱ��app of Commerce and Arizona С��ñֱ��app of Commerce and Industry applauded the proposed plan. 

“This budget is not only fiscally responsible, but it is loaded with meaningful reform,” said Glenn Hamer, president and CEO of the Arizona С��ñֱ��app of Commerce and Industry that represents thousands of employers across the state. “Arizona is now spending more from all sources on a per-pupil basis than at any time in the state’s history.

“The governor’s education initiatives will help our students make up for any pandemic-induced learning loss and will help parents, including those with limited transportation options, find the best educational fit for their kids, something that has become even more important during the last several months of educational disruptions.”

The $12.6 billion plan is the largest in the state’s history. Now, the governor and state Legislature will begin negotiations to produce a final spending plan before the conclusion of the fiscal year on June 30. 

Federal CARES Act relief helped state stay the course 

Arizona is in a stronger fiscal position than many states around the country with 97 percent of jobs lost during the pandemic now recovered, budget analysts from the Governor’s Office of Strategic Planning and Budgeting (OSPB) reported. 

About $38 billion in pandemic relief from the federal CARES Act this past year is one reason the state is faring well. Arizona’s healthy pre-pandemic economy and a $1 billion rainy day fund also saved the day, they said. 

Here’s are some of the highlights:

Income tax cuts 

The budget proposal includes $200 million in income tax cuts for fiscal 2022, which begins July 1. Ducey, who will be termed out of office this year, wants to extend his legacy of lowering taxes by including plans to extend the $200 million tax cut another two years. 

While details will be hammered out over the next few months, the tax cuts will help taxpayers “across the board,” the governor said. 

Education, school choice, civics education, rural broadband

In addition to $389 million to help students catch up, the budget includes an additional $250 million for K-12 education above and beyond inflation. 

Funding is targeted for programs to provide COVID-19 relief, rural broadband, early literacy, and additional civics education programs. 

Among the biggest ticket items for K-12 education are: 

• $119 million for school building renewal grants

• $52.6 million to complete two schools already under construction and start construction on five new schools

• $10 million to inform families about education options and support transportation innovations that expand school choice

Wildfire prevention with inmates helping out

The proposed budget includes $24 million for the Arizona Healthy Forest Initiative, a joint program between the Departments of Forestry and Fire Management and Corrections, Rehabilitation & Reentry. 

The Healthy Forest Initiative expands opportunities for state inmates to learn crucial job skills for post-sentence employment by treating our state’s land and wildlife, putting a greater focus on fire prevention.  

Health and welfare

Ducey’s budget also includes money to help Arizona’s most vulnerable citizens including children and the elderly with funding allocated for long-term care surveyors to address high caseloads and backlog. 

Items in the proposed budget with health and safety in mind include:

• $92.7 million in FY 21 supplemental funding for the stabilization of child care centers and to further support providers during the pandemic

• $25 million for the implementation of the Family First Prevention Services Act, focused on keeping children safely with their families

• $18 million to fund the continuation of the Child Care Waitlist and for a new pilot program that provides child care to children of parents pursuing education and nursing degrees

Higher education 

Arizona’s three public universities have been on the front line of research and action to address COVID-19 issues in the state. CARES Act and state funding to help reimburse them and  continue to produce an educated workforce includes:

• $115 million in COVID-19 relief, provided via CARES Act funding

• $35 million to support the public universities’ workforce development for the New Economy initiative

Public safety 

Prison construction including revamping outdated infrastructure is part of the budget including $54 million to address building renewal needs across the Arizona Department of Corrections, Rehabilitation and Reentry (ADCRR), including $25 million for critical safety projects at the Eyman Complex in Florence. 

The budget includes funding to recruit and retain Department of Public Safety (DPS) employees, equip DPS officers with body cameras and necessary support for video and IT management, and update the statewide land mobile radio network. 

Highway infrastructure, online portal for new businesses

Other items in the budget are the launch of a “hoteling pilot program” to increase options for government workers to continue to work remotely and a new online portal where new businesses can complete all state paperwork requirements.��

It also allocates $33.1 million to fund a major expansion of the I-40 West broadband corridor, in addition to $40 million in Federal CARES Act funding for the I-19 and I-17 broadband corridors.

Rainy day fund still holding near $1 billion 

Another positive feature of the budget is Arizona’s $1 billion rainy day fund. It remains almost fully intact at $954.4 million. While many states used these funds to address shortfalls in response to the pandemic, Arizona last year used $55 million to address one-time public health expenses, not shortfalls, budget analysts said. 

To see a complete list of details in the budget, go to:

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Governor Doug Ducey’s seventh State of the State address was delivered under the most difficult circumstances the state and nation have faced during his tenure as governor.

The January 6 invasion of the United States Capitol, something that hasn’t happened since 1814 when the U.S. was at war with Britain, shocked all Americans.

The country is in the grips of a pandemic that has spared no state its wrath, including Arizona. More than 10,000 Arizonans have lost their lives to this terrible disease.

The task before the governor was to convey a message that all Arizonans, regardless of political affiliation, age, or zip code could unite around. He delivered. The governor used his speech to present a thoughtful, soberminded policy response to the pandemic that has affected every facet of life in Arizona.

Vaccines

Job 1 is to ensure the vaccines get into the arms of as many Arizonans as quickly as possible. The state is rolling out the vaccine to sites urban and rural, including a massive 24/7 site at State Farm Stadium in Glendale. Thanks to the healthcare professionals whose work over the past year has been nothing short of heroic, as many as 6,000 Arizonans each day will get a jab in the arm at that location alone (including my mom, who just got her first dose).

Liability protections

The governor and legislative leaders are rightly focused on restoring Arizona’s health. But there are some, unfortunately, who would choose to use this period as a chance to make a quick buck.

The С��ñֱ��app agrees strongly with Gov. Ducey that this statewide emergency shouldn’t be leveraged by trial lawyers to file frivolous Covid exposure lawsuits. Employers large and small, cities and town, schools and universities, hospitals and healthcare providers, and nonprofits that are responsibly adhering to all applicable public health protocols should be lauded, not punished. We’ll be leading the coalition to ensure a smartly tailored liability protection bill gets to the governor’s desk, just as other states have done with bipartisan support.

Economic recovery

Not only is the governor focused on restoring Arizona’s health, but he also wants to ensure Arizona bounces back strongly from the pandemic-induced economic downturn.

We’re in better shape than much of the country, but there is still work to do. Our important hospitality sector, for example, is still struggling. Small businesses have been particularly hard hit. Not only are they grappling with the fallout of the pandemic, but many of them could be hit with one of the highest small business taxes in the country due to the narrow passage of Proposition 208 in November.

The new tax is facing a legal challenge due to its apparent violation of the revenue expenditure limit in the state constitution, something the nonpartisan Legislative Council identified before petition signatures were gathered. If the tax stands, though, it will only reinforce the need to “think big” on tax reform this year, as the governor said.

Just as the governor and the Legislature have been able to count on the Arizona С��ñֱ��app to lead the business community in previous efforts to enhance Arizona’s competitiveness, we’re ready to roll up our sleeves on tax reform in 2021.

Education

The pandemic has also dramatically affected Arizona’s school-aged kids. From Kindergarten to higher education, too many students haven’t been inside a classroom since last March.

Some families have been able to adapt with online learning or have pivoted to charter schools, private schools, homeschool pods, or have taken advantage of other options on the state’s school choice menu. For many families, however, the pandemic’s effect on their child’s education has meant nothing but frustration and worry.

The governor wants to help, and so do we.

In 2021, we’re ready to partner with Gov. Ducey and the Legislature to bridge the digital divide exacerbated by the pandemic, as well as ensure there are resources to support kids who’ve fallen behind academically. We look forward to building on our record of a relentless pursuit of increased funding for education as evidenced by our support for initiatives like the 20×2020 teacher pay raise plan, Proposition 123’s infusion of $3.5 billion from the state Land Trust into the K-12 system, the Results Based Funding plan to reward schools producing outstanding results, and more.

As a result of our efforts and the hard work of Gov. Ducey and the state Legislature, Arizona is now spending more on K-12 education on a per-pupil basis from all sources than at any time in the state’s history.

Like Gov. Ducey, what we cannot support, however, is an erosion of school choices. Due to the educational disruptions wrought by the pandemic, many parents are taking advantage of the choices Arizona affords for the very first time. These options have proven a lifesaver for some families. We should increase Arizona’s choices, not roll them back. For example, the governor has identified transportation an area ripe to help increase choice.

Similarly, we will continue to champion accountability for educational dollars. Employers have demonstrated a willingness and desire to back increased funding for education, but they expect results and wise stewardship.

The governor and Legislature begin their work in 2021 amid significant challenges. But thanks to the deployment of lifesaving vaccines and with more in the pipeline, each day is a little bit brighter. No matter what happens this legislative session from a policymaking perspective, let’s heed Gov. Ducey’s counsel to approach this year with a spirit of unity and compassion.

Glenn Hamer is president and CEO of the Arizona С��ñֱ��app of Commerce and Industry. 

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Getting Arizona vaccinated, bringing students back up to speed academically and keeping the economy open were key tenets of Arizona Governor Doug Ducey’s message during his 2021 State of the State address Monday.

The governor called on citizens to continue guarding against the spread of the virus and to work together with “unity, integrity and compassion.”

“In so many ways, 2020 was an extremely tough year that brought out the best in us, and yet, sometimes, despite all, our best wasn’t enough,” the governor said on opening day of the state Legislature. “It’s a vicious virus taking some 10,000 lives in our state alone and it’s left nothing but grief in its path.

“With the vaccine, however, we aim to cut off that path as quickly as possible.”

Ducey said that healthcare workers, teachers and police officers were being vaccinated as he spoke. He announced that State Farm Stadium in Glendale opened Monday as a vaccine site and will continue to be open 24/7 to administer vaccines as they are rolled out in phases according to patient risk. Above all, everyone must continue to take precautions to stop the spread of the deadly virus so the state can return to normal.

“As for our work here, all agree the pandemic remains the most significant threat we face, and it will require vigilant attention for months to come. The risk is still serious, and so is the pressure on our hospitals and medical personnel.”

During the 22-minute speech, Ducey touched on several issues he is focused on for 2021. 

Keep economy open

Arizona already is doing better than the rest of the nation, in part because he didn’t enforce widespread lockdowns, Ducey said. 

“For Americans tired of living in states with high taxes, heavy regulation, low-growth, and fading opportunity, Arizona has become the destination,” Ducey said. “And they’re still coming to Arizona in 2021 because during the pandemic, we never took our small businesses or their workers for granted. 

“As bad as things got, we’re recovering fast. New businesses and residents have been added by the thousands. At this time last year, we were ahead of 45 other states in job creation and personal income growth. Today, we’re still top-five. But some Arizonans are struggling. And it’s got to be our priority to help them with a growing economy and more jobs.”

Proponents of severe lockdowns may be well intentioned but they fail to acknowledge other troubles that come into play with such drastic action, he said. 

“People still have bills to pay. Children in need of schooling. Businesses to run and employees who depend on them. There are lots of men and women who don’t have the option of remote work and don’t receive uninterrupted direct deposits. To make a living they have to show up somewhere.

“If we’re really all in this together, then we have to appreciate that for many families, lockdown spells catastrophe. Zero income. Inability to make a payment. Eviction. Foreclosure. And real personal anguish.”

More resources for education

Ducey emphasized the need to ensure students haven’t fallen behind academically, particularly those of lower socioeconomic means. 

The governor said he will advocate for more resources in the state budget for items like expanded broadband infrastructure and access, more educational choices for parents, longer school days, summer school, one-on-one targeted instruction and tutoring. 

He will bring students back into classrooms as teachers are vaccinated. 

“With every public-health professional, from Dr. Fauci and the CDC (Centers for Disease Control and Prevention) on down, saying that the safest place for kids to be is in school, we will not be funding empty seats or allowing schools to remain in a perpetual state of closure. Children still need to learn, even in a pandemic.”

Lower taxes for all 

Tax reform is needed to find ways to lower taxes on businesses and individuals, the governor said. 

“Every year I’ve been governor, we’ve improved income taxes in the taxpayer’s favor. We’ve simplified the code, lowered all rates, protected them against inflation, and eliminated an entire tax bracket. In all of this, we’ve proven that our government can fulfill every obligation, and answer the unexpected needs of a growing state, without raising taxes.”

Having come this far, Ducey said he has no interest in Arizona following the “depressing example” of other states losing opportunity because they have raised the tax burden

Other issues: Covid liability protection, gaming, smaller state government

In the coming weeks, the governor said he will work with legislators on a variety of goals: protections for businesses and organizations from frivolous lawsuits related to Covid-19, a modernized gaming compact to bring more revenues to tribes and the state, and greater access to telemedicine. 

Other goals mentioned were better roads and bridges, continued leadership on water innovation, better training for law enforcement, criminal justice reform, and wildfire prevention. 

Ducey said shrinking the “footprint of government” also offers cost savings. 

“With remote working by many state employees, we also have the chance to further limit the size, cost and footprint of government,” he said. “Let’s truly shrink government, by eliminating unnecessary state buildings and saving taxpayer dollars, so we can prioritize areas of need, like educating our kids, taking care of our sick, and keeping our neighborhoods safe.”

“Plenty of reasons to cheer”

Business community leaders hailed Ducey’s agenda.

“Today’s speech gave us plenty of reasons to cheer,” Arizona С��ñֱ��app of Commerce & Industry President and CEO Glenn Hamer . “The agenda laid out by Gov. Ducey was full of items the С��ñֱ��app and job creators look forward to working on with him and legislators from both parties. We share his desire to close academic achievement gaps, to protect parents’ right to choose the best educational environment for their kids, to continue the economic recovery by reforming our tax code to encourage job growth, to prevent plaintiffs attorneys from leveraging the pandemic for financial gain, and to expand broadband, which is essential for our continued economic development and our students and schools.” 

Working together with compassion and integrity 

Moving forward in a bipartisan manner with unity, integrity and compassion is extremely important right now, the governor said. 

So many Arizonans have been true heroes this past year, he said. Everyone must follow their lead.  

“Despite everything 2020 threw at us, in the face of a global pandemic, everyday Arizonans have demonstrated the true state of our state– from our frontline medical workers; teachers, moms and dads; public safety and first responders; small business people; Election Day workers; grocery store employees, and National Guard – we’ve seen heroism, sacrifice, service and acts of kindness, large and small. The state of our state is not only strong – it’s resilient.”

In closing, the governor called on the public to do it’s part: wear a mask, practice personal responsibility.

“With resilience and compassion, we move forward, allowing nothing to get in our way, and showing in the end the best kind of unity there is – the unity of caring about one another.”
For information about how vaccinations are being administered, go to: .

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Supporting small businesses still struggling during the pandemic, bolstering the state’s stressed healthcare system, and reducing the influence of out-of-state interests on Arizona’s ballot initiative process are some of the top items on the Arizona С��ñֱ��app of Commerce and Industry’s wish list for state legislators this year.  

The С��ñֱ��app revealed these and a host of other policy recommendations Friday during its annual 2021 Legislative Forecast Luncheon. Governor Doug Ducey and legislative leaders also discussed their priorities at the event.

“The health crisis has upended not only the Arizona economy but the entire world in this global pandemic,” said Glenn Hamer, president of the Arizona С��ñֱ��app. “Arizona has weathered this pandemic downturn just about better than any state and, as I’ve said many times, our governor has had just the right touch as we have weathered this once-in-a-century event.

“But some of our industries like tourism and hospitality continue to struggle.”

Hamer praised “heroic” healthcare providers and workers in saving lives. He also decried the violent protest that took place at the nation’s Capitol last Wednesday, resulting in five deaths. 

Almost 900 attend event to hear recommendations from business, lawmakers 

The С��ñֱ��app and the Arizona Manufacturers Council hold the event every year to release their of policy recommendations as well as hear from the governor and legislative leaders about their priorities for the legislative session that kicks off today.��

Almost 900 people attended the virtual event including dozens of local, state and federal elected officials and business and community leaders. Hamer thanked the sponsor of the event, Cox Communications, for providing the internet infrastructure that has proved essential for thousands of job creators and their employees to continue thriving during one of the “most disruptive economic periods in history.”

Gov. Ducey calls on everyone to prevent the spread   

This year’s short-term priorities were quite different from last year when state leaders grappled with topics like how to keep up with mushrooming population growth and the booming economy. 

This year, ensuring Arizona citizens receive Covid-19 vaccines quickly and bringing the economy to full recovery were top goals of all who spoke. 

Governor Doug Ducey made several remarks about his priorities for the session. Arizonans’ health is the number one priority now. Getting Arizona citizens vaccinated is critical, he said. 

“This is a modern medical miracle that I don’t think anyone could have foreseen in March,” Ducey said about the successful race to get a vaccine for the deadly virus. “Not only do we have the vaccines here from Pfizer and Moderna and others on the way, they are in the state and they are going into people’s arms.”

Ducey, whose 97-year-old grandmother just received her vaccine, said elderly citizens and health care and essential workers will be vaccinated first before the general public at large. 

Government will also focus on helping the underserved populations in tribal and rural areas.

Communicating that this vaccine is safe and effective is another priority to “get us back to normal as quickly as possible,” the governor said.   

Catching students up post pandemic 

As vaccines roll out, providing resources to education to bring children back up to speed in academics is another important step for economic recovery, Ducey said. Jobs and the economy will naturally follow, he said, and “no state is better positioned than the state of Arizona” to succeed.

Other priorities mentioned by the governor were to continue to work to strengthen relations with Mexico, secure public safety and commerce at the border, and champion Arizona tourism and exports on the world stage. 

Legislative leadership focused on covid, education, small businesses, jobs 

The event also featured a “fireside chat” with Senate President Karen Fann, Senate Minority Leader-elect Rebecca Rios, Arizona House Speaker Rusty Bowers, and House Minority Leader-elect Reginald Bolding, who spoke about what their priorities will be for the session. 

All stated that helping citizens and businesses recover from the pandemic is a major goal. Pressing issues include helping the unemployed get back to work, preventing families from being evicted from their homes, attracting and retaining business and industry, supporting education, and funding infrastructure like broadband access and highway construction.  

С��ñֱ��app business agenda unveiled 

At the event, the С��ñֱ��app and Manufacturers Council provided digital copies of comprehensive policy recommendations for the year. Hundreds of goals with business in mind include topics around education, free trade, civil justice reform, workforce development, the environment and water resources, transportation, tourism and much more. 

Dawn Grove, chair of the С��ñֱ��app’s , said that “first and foremost” priority will be recovery from the pandemic and mitigating the impact from Proposition 208. 

The proposition, adopted in November, created a new tax for top earning individuals and couples, but also is expected to affect tens of thousands of small businesses. These are “pass through” entities, meaning they do not file their income taxes as corporations. Instead, they file under the individual tax code. 

Under the new law, Arizona’s top income tax rate has jumped from thirteenth lowest in the nation to the ninth highest, going from 4.5 to 8 percent, a 78 percent increase, affecting individuals who earn $250,000 and joint filers who earn $500,000. Small business owners who file under the individual tax code are subject to the tax as well. 

The new tax rate could not only hurt Arizona’s small businesses — companies with 500 or fewer employees — but it could dampen investment here, Grove said. 

Among measures being proposed to help the small business community and keep the state a desired location for new industry are reductions in commercial property taxes. 

С��ñֱ��app officials will also be pressing state lawmakers to enact laws to protect employers, cities and towns, and organizations from “predatory” Covid-19 lawsuits. 

Reforming state ballot initiative process another high priority

С��ñֱ��app officials also will be calling on the Legislature to continue to work in a bipartisan manner, pass laws to promote educational excellence in schools, and to reform the state’s ballot initiative law that has been overtaken by out-of-staters, Grove said. 

“Arizona’s propositions, as you know, once passed can almost never be changed even when they cause the opposite of their intended results,” Grove said. “We can and we must do better together. Our second priority will be to advance reforms to protect our initiative system from out-of-state agendas and enhance the credibility of the system. 

“While recent reforms have added some rigor to the citizen initiative system, Arizona’s system remains attractive to out-of-state groups to use our ballot box to implement policies not in Arizona’s best interest, in part because they know it’s so easy to pass here and so hard to change.”

To read the full business agenda from the С��ñֱ��app and Manufacturer’s Council, go to:  .��

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