10 most important Arizona business stories of 2021
The year 2021 is in the past. But as we look forward to a healthier and more prosperous 2022, here are my top-10 Arizona business and policy stories of the year that was:
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1. Once-in-a-generation tax reform
Staring down the potential imposition of one of the nation’s highest individual income tax rates, the state Legislature and Gov. Doug Ducey worked to ensure that Arizona’s tax environment remained one that attracts job creators and creates economic opportunity. Together they passed a $1.3 billion tax cut package that delivered a 2.5% flat income tax rate. But they didn’t stop there. They also reduced the commercial property tax assessment ratio from 18% to 16% over four years, and they adopted an alternative small business tax filing option. Combine these reforms with the state Supreme Court’s ruling in August that Proposition 208 – the measure that sought to jack-up Arizona’s top income tax rate by nearly 78% – was unconstitutional, and 2021 was a very good year for taxpayers.
2. Record jobs recovery
Proving that public policy matters, few states bounced back from the pandemic-induced downturn like Arizona. We learned in August from the Arizona Office of Economic Opportunity that Arizona had recovered 100% of the private sector jobs it had lost since April 2020, the third-fastest recovery in the country. By November the state had recovered more than 100% of all jobs lost, and saw one of the country’s largest month-over-month unemployment drops, resulting in a 4.7% unemployment rate, the lowest in more than a decade.
3. Arizona one of tops in the nation for in-migration
Americans vote with their feet. The world’s freest people can rent a U-Haul and choose anywhere in the country to call home. In 2021, Americans chose Arizona, making the state one of the four largest population gainers and one of the top-3 in total net migration gains. When the Chamber and our colleagues in the business community evangelize about the power of free-market policies, this is what we’re talking about.
4. Intel’s record investment
Intel in March announced its plans to construct two new fabs at its Chandler Ocotillo facility, representing a $20 billion investment, the largest in state history, which will result in 15,000 local long-term jobs. Not only is the investment huge, but it solidifies Arizona’s place as the hub for the jobs that will define the next decade and beyond. Forbes rightly referred to Arizona as “Semiconductor Central.”
5. Next generation manufacturing
That Intel investment is just one example of the way Arizona’s reputation for next-generation manufacturing grew in 2021. The stories were frequent and plentiful. ElectraMeccanica announced that its 235,000-square-foot manufacturing facility will be rolling by next summer and that its Solo electric vehicle is undergoing validation testing. KORE Power announced that it’s bringing a first-of-its kind lithium-ion battery manufacturing facility to Buckeye. Lucid Motors celebrated the official start of production of their vehicles at the company’s Casa Grande facility, and the Lucid Air model won Motor Trend’s Car of the Year Award. Nikola delivered its first Tre battery-electric vehicle (BEV) pilot truck fresh from its Coolidge plant. These are the types of headlines that make other states green with envy and they’re the jobs that will power the economy for years to come.
6. Liability protections
The Legislature and Gov. Ducey passed and signed into law S.B. 1377, legislation that establishes commonsense liability protections for health care providers, businesses, schools and universities, non-profits, and government entities that are taking responsible steps to prevent the spread of the virus. The bill was good news for businesses getting back to some semblance of normalcy without having to worry about the threat of abusive litigation.
7. Nationally recognized vaccine rollout, new therapeutic innovations
It was a year of vaccines and therapeutic innovations as Arizona did its part to take down the pandemic. The White House recognized Arizona’s fantastic mass vaccination site at State Farm Stadium, and the Ducey administration and county health departments rolled out additional sites across the state, ensuring any Arizonan who wanted the lifesaving jab could get it. Arizona Chamber members were often behind the scenes, mobilizing their workforces to volunteer at the sites and keep them humming with remarkable efficiency. And credit to our nation’s pharmaceutical innovators, who not only developed the vaccines in record time, but who have also created game-changing antiviral pills that will keep Covid-positive cases out of the hospital. These companies and our nurses, doctors, and other healthcare professionals will make 2022 a brighter one. They deserve our sincere thanks.
8. Regulatory modernization
More red tape got cut in 2021 to meet the moment we’re living in. Ensuring we can get cocktails to go with our takeout orders might not seem like a big policy innovation, but the bipartisan effort demonstrated Arizona policymakers’ willingness to ensure that our regulatory environment makes sense in the face of changing times. The Legislature and governor also removed the disincentive for businesses to appeal negative state agency decisions by making the attorney fee recovery statute for non-tax administrative action consistent with regular tax appeals, and they raised the aggregate cap on reimbursed fees. I’ll admit it’s the kind of in-the-weeds regulatory reform that might not have been splashed on the frontpage, but it makes Arizona a better state to do business.
9. Build Back Better bites the dust
The massive domestic spending bill that President Joe Biden made a centerpiece of his 2021 domestic agenda fizzled out before the end of the year, which was good news for job creators and anyone worried about Jimmy-Carter-level inflation rates. But it wasn’t just the price tag of the tax increases and transfer payments – it was the rotten policy, with measures ranging from environmental regulations to giveaways to Big Labor and trial lawyers, to interference in drug pricing, all of which resulted in a bill so big and so bad that it deserved to collapse under its own weight. West Virginia Sen. Joe Manchin has gotten a lot of ink for his refusal to go along with the White House and Majority Leader Chuck Schumer’s artificial timeline for the bill’s passage, but Arizona Sen. Kyrsten Sinema deserves credit for her work to make a bad bill a little better. We need her and Sen. Mark Kelly to keep up the fight in 2022 if there’s an attempt to resuscitate this legislation.
10. PRO Act collapses
Arizona’s Sinema and Kelly stepped up big time in their refusal to sign on as co-sponsors to the Protecting the Right to Organize, or PRO Act, in 2021. The bill contained a litany of items on organized labor’s wish list, all of which would have driven a wedge between job creators and employees and sparked litigation and headaches. After a party-line vote in the House, things looked bleak, but Sens. Sinema and Kelly haven’t gone along, depriving Sen. Schumer of the 50 co-sponsors he says he needs to bring the bill to the floor for a vote. If the filibuster stays in place, the bill faces a rough road, but that’s a big “if,” and Schumer would love nothing more than an excuse to dump the filibuster and ram through the PRO Act as a standalone bill or stick it into Build Back Better. No matter the strategy, our senators have the power to stop it.
That’s just a glimpse into the business and policy wins that defined a year with the potential for dozens more, on topics ranging from infrastructure to the job market to cryptocurrency and NFTs (to name a few). We at the Arizona Chamber are looking forward to 2022, which we’re confident will be another year of job creators, lawmakers of both parties, and the governor working together for a more economically vibrant and resilient Arizona. Happy New Year.
Danny Seiden is president and CEO of the Arizona Chamber of Commerce & Industry.