At this time of year, we naturally think about the year and the next 12 months.
First, some reflections on 2024 from my position leading the Arizona Chamber of Commerce.
The charm of work
A divided state government probably reduces the chances of passing major legislation that has a significant impact on Arizona’s future, but the Legislature and Governor Hobbs reach an agreement to extend the Arizona Department of Commerce. Don’t wait. It’s perhaps the most effective economic development agency in the country, winning jobs so often that there’s a danger of taking ACA CEO Sandra Watson and her team for granted. That would have been a big mistake.
There was a time in the not-too-distant past when investments worth tens of millions of dollars garnered headlines. Today, Arizona is competing and winning for billions of dollars in investment. The ACA leveraged the tools given to it by successive legislatures and governors to propel the state into the big leagues in attracting jobs. We are pleased that our legislators and governor have ensured that the ACA will continue its essential operations in 2024.
crushing regulations
Even the best state economic development agencies can only do so much when they are handcuffed by federal regulations. The Chamber spent countless hours throughout 2024 focusing on regulations from Washington that were putting the state’s ability to continue to grow at real risk.
Arizona’s business community and Environmental Protection Agency regulators agree on many points: We want clean air, clean water, and healthy communities. Often, when our opinions differ greatly, it’s about the best way to achieve those goals. In some cases, they can’t even agree on basic facts, such as whether a pollutant originates in Arizona or from far beyond state lines. In 2024, that conflict could play out in court.
One of my hopes for 2025 is that the state and federal governments can reach some reasonable balance. Arizona businesses have proven to be active partners in efforts to improve air quality. I hope the EPA will join us.
meet demand
APS and SRP met record electricity demand in August, surpassing the previous demand record set in 2023.
The ability of Arizona’s power companies to continue to meet the ever-increasing demand for electricity is nothing short of amazing, and I still think it’s underreported. Trust me, if there was an extended power outage during the summer, you would hear about it a lot. However, we have come to expect the air conditioner to come on when we need it.
The level of reliability Arizonans enjoy from their utilities is due to smart planning, year-round maintenance, and smart investments in new energy infrastructure.
But let’s praise where praise is due. Not only do we appreciate the good work of our utilities, some of the strategies they are developing are made possible by the members of the Arizona Corporation Commission. They take care of ratepayers while ensuring customers continue to take advantage of a dynamic mix of energy sources and reliance on market forces.
What are the alternatives? Look to neighboring California. In California, strict mandates and heavy subsidies for certain renewable resources drive up costs and reduce grid reliability.
Voters prioritize quality of life
Although there were some surprises in this election, it was clear that the business community’s crystal ball predicted that Maricopa County voters would continue the sales tax that funds transportation infrastructure projects in Arizona’s most populous county. Ta.
There should be a healthy tension in politics between spenders and savers, and critics of Proposition 479 worked hard to send voters a responsible and fiscally sound proposal on the November ballot. His achievements are worthy of praise.
But voters weren’t doom and gloom about the taxes they’ve already been paying for decades and have delivered one of the best highway systems in the country.
Election years give voters a choice. And in 2024, we were reminded that, especially at the local and county level, voters choose to maintain or improve their quality of life and are willing to pay for it.
The coming year
As we begin 2025, let’s think about politics and policy.
Elected officials, don’t read too much into your mandate. You may have won the election, but it’s probably not because voters want you to pursue the most extreme goal on your political wish list. There’s nothing wrong with disappointing your most ardent supporters a little. That usually means spending more time focusing on the core responsibilities of your job and less time talking about it.
Regarding customs duties, it’s easy. After renegotiating the North American Free Trade Agreement during his first term, President Trump announced that the successor U.S.-Mexico-Canada Agreement would require an overhaul, imposing huge tariffs on imports, including goods originating from Canada and Mexico. states that it should be imposed. .
Customs duties are taxes paid by importers and passed on to consumers. Unless the next president wants to impose massive tax increases on Americans and wreak economic havoc across North America, he will reconsider this campaign promise.
Extend the tax cuts, but consider all aspects of the impact on the state. The president-elect intends to extend expiring elements of the 2017 Tax Cuts and Jobs Act. It is wise to maintain low marginal tax rates and continue to encourage investment in new machinery and equipment. But the White House and Congress will need to ignore some bad ideas surrounding BRI.
First, don’t go back to allowing taxpayers in high-spending states to deduct a larger portion of their state taxes on their federal tax returns. If California and New York taxpayers do not like lowering the SALT cap, they can elect new leadership at the state and local level.
Second, be careful where you look for savings. For example, cutting the federal matching funds that flow to states to administer their Medicaid programs would mean significant cost shifts for states, threatening not only coverage levels and provider payments, but broader state budgets. , there is a risk that funds will be diverted from other important priorities. education, infrastructure, public safety, and more.
No more goodbyes. We said goodbye to our National Hockey League franchise in 2024. The complicated deal leaves open the possibility of a team resuming in Arizona someday, but in the short term it means there will be no top-level hockey league.
I began this column by praising leaders for not taking the state’s job attraction team for granted. Hockey’s exit from Arizona is a reminder that professional sports teams should never be taken for granted.
It is not explicitly written that the NFL, NBA, and MLB must be based in Arizona. In 2025, policymakers can take major steps here to ensure that professional sports continue to thrive.
I wish you a happy, healthy, and prosperous New Year.
Danny Seiden is president and CEO of the Arizona Chamber of Commerce.
