from Oxford Economics reveals the economic consequences of new air quality standards that have been proposed by the Biden administration.

The Environmental Protection Agency in January proposed more stringent air quality standards relating to PM2.5, or fine particulate matter. By tightening the annual threshold PM2.5 standard from a level of 12 micrograms per cubic meter to a level between 9 and 10 micrograms per cubic meter, the administration is hoping to create cleaner, safer air. The administration has even considered tightening the restrictions further, to 8 micrograms per cubic meter.  

Critics, including job creators, say the top-down regulation will come at a cost.  

“We all want clean air, but this new rule to regulate fine particulates known as PM2.5 could serve to regulate many of our Arizona manufacturers, agricultural interests and other entities out of business,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said. “At a time when employers face rising inflation and fuel costs and a tight labor market, more regulatory red tape only means higher costs for businesses and Arizona families.” 

This proposal is likely to create many problems for state economies, including Arizona. The EPA regulation will cause a ripple effect that will jeopardize American competitiveness in manufacturing on the global stage, slow down future investments in innovation, and slow market growth, creating job loss and hindering future job growth.  

The Oxford study, commissioned by the National Association of Manufacturers, breaks down the potential impact, showing that these new regulations stand to put 852,100 to 973,900 current jobs at risk, both in manufacturing and in supply chains.  

The study also estimates that up to $197.4 billion of economic activity will be impacted by this change.  

A state or county that does not meet the federal standard to some degree enters into what’s called “nonattainment”. Consequences for a region in nonattainment include the potential loss of ability to permit new businesses and locally control and plan for air quality measures. Nonattainment eventually leads to limitations to expansion and investment in new businesses and stifles the economic outlook in a region. 

By tightening air quality standards, the EPA makes it much more difficult to avoid nonattainment, which will inevitably stifle business growth. In fact, the report projects that the United States stands to lose an additional $138.4 billion in output and 501,000 jobs through 2027.  

While the report warns of potential risks, it also highlights the ways in which the manufacturing and business sectors have innovated and contributed to solutions that improve air quality.  

“U.S. manufacturing industries are often environmentally cleaner than the global average,” the report explains. “If environmental regulations cause U.S. manufacturing output to contract, this will lead to a greater reliance on importing products manufactured overseas. This could have the unintended effect of increasing air pollution and greenhouse gas emissions globally.” “This analysis makes clear these new regulations will weaken our ability to invest in the technology and processes that would continue to reduce emissions—while jeopardizing high-paying manufacturing jobs,” NAM President and CEO Jay Timmons “We need to let manufacturers do what they do best: innovate and deploy modern technologies to protect the environment, while creating jobs and strengthening the economy.”

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The head of Arizona’s leading business advocacy group said Wednesday that he was pleased the governor and legislative leaders avoided an impasse that could have led to a government shutdown, but that he is concerned about the number of parochial projects in the nearly $18 billion state budget being debated by the state Legislature this week. 

“The good of it, and there’s not much I think, is it shows that you can have a split government, with Governor (Katie) Hobbs, President (Warren) Petersen and Speaker (Ben) Toma coming together, to actually pass a budget and keep our government open,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said in an with KTAR host Mike Broomhead on Wednesday. “The bad of it is the way in which that process developed was that each member was basically allotted a chunk of cash, so we have a state budget that is so loaded with pork barrel earmarking that it reads like a city council budget.” 

The budget passed the House and Senate Appropriations committees yesterday. The Senate passed budget bills in an overnight session that ended early Wednesday morning. Despite protests from Democrats that the budget did not address their priorities, the bills all passed with some Democratic votes. The House is debating the budget today and is planning to take recorded votes on it following debate. 

Seiden said the state budget should address matters that affect the entire state, not projects that are best left to local jurisdictions.

“The concern I have thinking about statewide business interests in the future is it’s not a very forward-looking budget or looking to address a lot of matters of statewide concern. What you have is people spending a lot of money on projects benefiting their area that doesn’t benefit the whole state, but the state shoulders that burden,” Seiden said. 

Seiden cited the dangers of underfunding state university priorities and reallocating funds previously devoted to aiding K-12 public schools that are achieving better academic outcomes, especially in rural areas and urban areas that are typically underserved.  

Seiden said he’s concerned that without proper funding, the state’s higher education institutions won’t be able to produce the number of graduates necessary to meet the demands of Arizona’s growing economy.   

“You want to talk about what’s been a useful tool in economic development? It’s us funding the engineering programs at these universities, so I’m very concerned to see that cut.” 

The $68 million that was previously pegged to the K-12 results-based funding formula was reallocated to K-12 baseline funding. 

Seiden said he’s also worried about the implementation of the Legislature and previous administration’s plan to fund solutions to solving Arizona’s water crisis. 

“Just looking at how the priorities are unfolding when we’re running a two-billion-dollar surplus, just gives me some pause moving forward,” he said. 

Despite its concerns with some aspects of the budget, the Chamber acknowledged that the bipartisan agreement is only possible because of the strong economic foundation on which this year’s negotiations began.

The budget maintains the competitive tax environment that has been implemented over previous years, including the country’s lowest individual income tax rate among states with an income tax. The budget also continues to phase down the commercial property assessment ratio, a policy that was adopted last year with strong Chamber backing. 

While some transportation projects were local in scope, major freight corridors that affect the entire state’s prosperity like Interstate 17 and Interstate 10 between Casa Grande and Chandler will see funding for significant upgrades.

In the workforce and college readiness space, the budget calls for funding to boost the number of students who can take college-level courses while still in high school, a program strongly supported by the business community. 

Seiden says the business community’s role in future year budget negotiations is critical.

“We have to get louder, and more protective,” Seiden said. “If you like the growth, if you like the economy, let’s not mess this up now. Let’s not fumble as we go towards the endzone on the great momentum that has been built.”

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Among Gov. Katie Hobbs’ most recent vetoes was a bipartisan measure that would have expanded an existing program that allows citizens to produce foods for sale out of their home kitchens.

Arizona already has a successful regulatory framework for cottage food producers managed by the Arizona Department of Health Services.

Under current statute, many home-cooked food products like baked goods, coffee beans, and jams, are to be sold by registered, trained cottage food producers. Most of the in Arizona are single mothers or families who feed their communities for added income on the side of their other responsibilities.

The bill, HB 2509, would have expanded the definition of “cottage foods” to include foods that require time or temperature controls for safety. Those who violate current laws by selling these kinds of products run the risk of facing up to 30 days in jail and a $500 fine.

In her letter explaining her veto to House Speaker Ben Toma, R-Peoria, Hobbs claimed the measure would “significantly increase the risk of food-borne illness” because “high-risk” foods that are temperature-sensitive, like tamales, have the potential to spoil. She warned of the dangers of hazardous chemicals, illness, and infestation in the homes where local families live and prepare food to make ends meet.

Many Arizona legislators disagreed with this assessment.

“This bill expands an existing program that’s been in place since 2010. It’s a good program that allows good people to produce good products at home safely. This bill will not make this a more reckless or more invasive process,” bill sponsor Rep. Travis Grantham, R-Gilbert, said.

Opposition to the veto didn’t just come from Republicans, however.

“As a public health professional, I am VERY disappointed to see that a bipartisan bill allowing Arizonans to make an honest living by selling things like tamales, tortillas, and sweets legally was vetoed,” said Alma Hernandez, D-Tucson, in Wednesday night. “It makes no sense. People are NOT dying from street food poising. This is personal. Not only do many Hispanics depend on this to make a living but many fear being reported and fined. When my father was injured and could not work, my mother made cakes from home to ensure we could put gas and food on our table. This does nothing in the name of ‘health & safety.’ It goes against my community. It’s not a veto to be proud of, and I know I am not the only one who feels this way. I will continue to support those in my community who work hard and make cottage foods from home to get by, and so should everyone else.” 

The bill passed the Legislature with broad bipartisan support, earning 45 votes in the House and 26 in the Senate, prompting legislative leaders to take steps to override the governor’s veto, which would take a two-thirds majority vote in both legislative chambers.

“The veto override motion is prepared,” Toma to state Senate President Warren Petersen, R-Gilbert.

Hobbs earlier this month set the record for most vetoes issued by an Arizona governor.

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Legislation to prohibit a city, county, or the state from mandating hotels and motels to accommodate the unhoused passed the state Senate last week and is awaiting action by Gov. Katie Hobbs. Concerned that hotel workers could be made to fulfill the role of social workers, the Arizona tourism industry is urging the governor to sign the bill into law.

Introduced by Rep. Matt Gress, R-Phoenix, HB 2379 was written to prevent similar programs already in place or proposed in California from gaining a foothold here.

Los Angeles voters next spring will decide at the ballot box whether the city will mandate hotels to accommodate the unhoused in exchange for vouchers when the hotel has unoccupied rooms.

Opponents of the L.A. measure have cited safety and wellness concerns since hotel and motel staff are not equipped with the resources or training to adequately help individuals who are experiencing homelessness, or to provide services related to mental and physical health.

In L.A. and in Arizona, stakeholders are working to balance the need for housing solutions with the limitations and rights of private hoteliers.

“People who work in the hospitality and leisure industry in these hotels and resorts are not equipped to provide the kinds of social services that people who are unhoused need,” Gress said during a committee hearing on the bill. He explained that, while hotels may be able to voluntarily contribute to the solution, pushing them into the human services industry was an inappropriate method.

Another California community is already experiencing the negative ramifications of providing hotel rooms to the homeless in exchange for government-provided vouchers.

Law enforcement authorities in the San Diego suburb of El Cajon last month of two convicted sex offenders who are accused of sexually assaulting a minor at a hotel where the two men were staying. The men were using a San Diego County taxpayer-funded voucher provided by a nonprofit group that works to place homeless individuals in available hotel rooms.

El Cajon Mayor Bill Wells, an opponent of the program, says his city’s police department has charged 90 homeless people staying in hotels with crimes.

“This didn’t just come out of the blue,” Wells. “We’ve been worried about this hotel voucher program for over six months now.”

Also last month, El Cajon police arrested another sex offender for a probation violation at a hotel where he had been staying thanks to the same county voucher program. The 41-year-old male, who was also in possession of methamphetamine, the agency that provided him the voucher told him he could get $2,000 in vouchers every two weeks for up to two years.

Attempts by El Cajon to about how many voucher-users could be housed in one hotel were met with threats of a lawsuit from the state attorney general.

While there is a need for long term solutions, supporters of HB 2379 argue that other options ought to be pursued.

“We all want solutions to improve homelessness in our state and across the U.S., but forcing small business owners like hoteliers to shoulder that burden is not a reasonable or sustainable path forward,” Arizona Lodging and Tourism Association President and CEO Kim Grace in a recent op-ed. She called on local governments and Hobbs to “take responsibility and lead” to fix the housing crisis.

State Sen. Justine Wadsack, R-Tucson, said she supports the bill.

“I’d like to thank Mr. Gress for bringing this bill. I think this is very important. This feels like a takeover. To force private businesses to have to accommodate is not the American way,” she said.

The bill passed out of both the House and the Senate on party-line votes. Today is the last day for the governor to sign or veto the bill.

In addition to the Arizona Lodging and Tourism Association, the bill is supported by the American Hotel & Lodging Association and the Arizona Chamber of Commerce & Industry.

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A new bill would encourage high school students to take more dual enrollment courses by providing financial assistance to qualifying students and providing incentives and funding for schools and teachers that offer the courses.  

Dual enrollment courses are college level courses that are taken in a high school classroom to earn both high school credits and college credits.  

The sponsor of SB 1717, Sen. Steve Kaiser, R-Phoenix, touted the merits of the legislation during testimony to the Senate Commerce Committee. 

“This is a great tool for families across Arizona to reduce the cost of college and to help folks get a trade before they graduate high school. What I really love about this bill is that it is a reimbursement; students have to be performing at a certain GPA, they have to be passing classes,” Kaiser said. “Additionally, it helps with teachers getting certified. The [reason] why dual enrollment is not more widespread is twofold. First, there are not enough teachers trained and certified; second, these programs can be very expensive. This [bill] solves both problems.” 

The bill later was heard in the Senate Appropriations Committee, where it also passed with bipartisan support. 

“This bill offers our schools and students a real opportunity to expand and participate in dual enrollment programs across the state. This could be a monumental step in increasing access to post-secondary education,” Sen. Raquel Terán, D-Phoenix, said. “This bill would provide significant investment to address those costs and provide a stipend for teachers who meet the level of training required.”  

Fellow Phoenix Democrat Sen. Lela Alston agreed.

“I’ve been working for 10 years with the Phoenix Union High School District to get more kids enrolled in dual enrollment,” she said. “For many of our kids it’s an issue of not ever thinking about going to college. If they can have some of their credits already paid for, it can help them not only with their confidence in their ability to do college work, but also allows them to save money.”  

The bill has many supporters including school districts, community colleges, the Arizona Career and Technical Education District Consortium, all three state universities, the Greater Phoenix Chamber of Commerce, Greater Phoenix Leadership, and the Arizona Chamber of Commerce & Industry.   

Former Arizona Superintendent of Public Instruction Jaime Molera said in a that the bill was “invaluable” and creates “a meaningful dual enrollment system that provides core academic credit or certification towards a career.” 

The bill awaits a vote of the full Senate before it can be considered in the House.

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Two proposals from state Sen. J.D. Mesnard, R-Chandler, that passed the Senate Finance Committee last week would give tax relief to businesses in this period of high inflation.  

Senate Bill 1263 would exempt all business personal property (BPP), or any property, other than real estate, from taxation in the state of Arizona.  

Under current statute, Arizona businesses are required to pay recurring property taxes every year for any equipment, supplies, or other property used for trade or business within their possession.  

“I view this as double taxation,” said Sen. Mesnard as he explained his bill. “People pay a sales tax when they purchase items. We make businesses pay personal property taxes when people do not.” 

Business community representatives agreed with Mesnard’s assessment. 

“This becomes a tax on honesty,” said Chad Heinrich, representing the National Federation of Independent Businesses “You could have, for example, two retail stores across the street from each other, both with similar property to the other. One decides to report their property, the other one doesn’t, maybe because they don’t know that they need to, and doesn’t report. [Those businesses] end up being on an unequal playing field.” 

Opponents of the bill voiced worries about the impact on revenues for counties and school districts that rely on property taxes.  

“The challenge has been that some of our communities are heavily reliant on the business personal property [taxes],” said Ryan Boyd, testifying on behalf of the Arizona Association of Counties. “We are very concerned that this would be a massive shift.”  

A second proposal, Senate Bill 1276, looks to accelerate tax reduction measures that were approved by the Legislature last year, so that the benefits of those policy changes can be felt sooner.  

“If you want to continue to compete in the region, this is the way that you do it,” Arizona Tax Research Association President Kevin McCarthy said. “We have improved, and we continue to need to make progress.”  

Supporters of both bills include the Arizona Chamber of Commerce & Industry, The Arizona Tax Research Association, The Arizona Chapter of NAIOP, the Commercial Real Estate Development Association, along with many others.

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A proposal by state Sen. J.D. Mesnard, R-Chandler, would give more voters a say in what propositions appear on statewide ballots. 

The state Senate Government Committee on Wednesday passed SCR 1015, which would refer to voters the question of whether to require initiative proponents to obtain petition signatures from each legislative district in Arizona. 

The resolution would require a minimum threshold of 10% of the overall required signatures to come from each legislative district in order for a proposition to qualify for the ballot. Turnout from the previous gubernatorial election determines the total number of valid signatures that must be collected.

Proponents say that this measure would ensure that propositions which make the ballot have support from every corner of the state, rather than just its most populous centers.

Under current law, there are no requirements for initiative backers to gather signatures from across the state, so petition circulators can concentrate their efforts in Phoenix and Tucson with no need to pitch their ideas to voters in more rural and exurban areas. 

“Initiatives are difficult to repeal or fix if there are issues, even technical changes,” Jenna Bentley of the Goldwater Institute said in testimony on the proposal. “We feel that it is important that these ballot measures get vetted as well as they possibly can. This just says that if you’re going to put a measure on the ballot, you need to go to every legislative district to do it.” 

Half of the states that have a citizen initiative process also have a petition signature geographic distribution requirement, including Arizona neighbors Colorado and Utah. 

Progressives on the committee expressed skepticism at giving voters outside metropolitan areas an opportunity to play a role in determining what initiatives secure a spot on the statewide ballot.

“This is effectively going to allow a single (legislative district) to block the desires of the whole state,” Sen. Juan Mendez, D-Tempe, said. 

The legislation passed the Government Committee on 5-3 party-line vote. Once approved by the full Senate, it will be sent for consideration to the House of Representatives. Ballot referrals are solely at the discretion of the Legislature and do not have to be approved by the governor. 

In addition to the Goldwater Institute, supporters include the Arizona Farm Bureau, the Arizona Chamber of Commerce & Industry, the East Valley Chambers of Commerce Alliance, the Arizona chapter of NAIOP, and the United Dairymen of Arizona, among others. 

Opponents include Planned Parenthood of Arizona, the Sierra Club Grand Canyon Chapter and Save Our Schools Arizona. 

If referred to the 2024 ballot, the geographic distribution measure would mark the second consecutive election cycle where voters were faced with an initiative system reform proposal. Voters in 2022 passed Proposition 129, which limits ballot measures to a single subject, and Proposition 132, which requires a measure seeking to raise or institute a new tax to receive at least 60% of votes cast to pass.

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