The 2025 Free Enterprise Report from the Common Sense Institute Arizona (CSI) was released Monday and ranked the state of Arizona amongst the states in education as well as the new indexes of economic performance and economic momentum.
According to Katie Ratlief, Executive Director of CSI Arizona, “Arizona continues to lead the way in key areas like tax policy, state budgeting, and educational choice, proving the impact of data-driven, common-sense policies.”
“However,” she added, “challenges in housing, public safety, and homelessness are beginning to slow our momentum. While Arizona remains a top destination for growth, addressing critical issues like crime and the housing crisis will be essential to sustaining our competitiveness. Fortunately, the policies that fueled much of Arizona’s success are still in place, and with a renewed focus on data-driven solutions to address issues like crime and housing, Arizona can solidify its position as one of the most competitive states in the nation for years to come.”
The report details Arizona’s positioning in the emerging recovery of 2025, particularly highlighting the success of the state and its persistent momentum. In an overall measure, the state ranked 27th in “free enterprise competitiveness,” with CSI emphasizing advances in taxes, state budgeting, energy and education, but noting the heavy limitations imposed by housing shortages and rising costs.
In education, Arizona ranked second in the nation in share of students enrolled in school choice options, seemingly ratifying the state’s first-in-the-nation universal Empowerment Savings Account (ESA) program which now provides financial support to over 83,000 families.
Arizona is leading the charge in school choice. Arizona ranks 2nd in school choice enrollment and 1st in education spending efficiency, according to CSI's 2025 Free Enterprise Report. While there's still room to improve graduation rates and test scores, the future of education in… pic.twitter.com/JNK1pbEOwC
— Common Sense Institute Arizona (@CSInstituteAZ) January 13, 2025
The report noted, “Arizona today has the most open K-12 educational market in the country, and hosts a diverse network of District, Charter, and private school options. Since the pandemic, its home- and microschool space has expanded rapidly. Today, about a third of Arizona’s K-12 students are not enrolled in the traditional District school system.”
The report also highlighted Arizona’s Energy situation, noting in a post to X, “Arizona remains a top 20 state for energy competitiveness, boasting one of the most reliable electricity grids in the nation.”
Arizona remains a top 20 state for energy competitiveness, boasting one of the most reliable electricity grids in the nation. Learn more about the state's energy competitiveness in CSI's 2025 Free Enterprise Report.
— Common Sense Institute Arizona (@CSInstituteAZ) January 14, 2025
CSI explains, “Thanks to maintaining the nation’s largest nuclear power plant and the moderate and deliberate pace of adoption of wind and solar energy sources (supplemented by robust investment in natural gas), the state’s electrical grid remains reliable and affordable.”
Finally, Arizona’s advantageous tax system was highlighted with the 2.5% flat income tax and property tax instant depreciation of business investments cited in particular for contributing to an extremely competitive tax and regulatory system. Arizona ranked 7th in the nation on the Taxes & Fees Competitiveness Index.
The report observed, “Arizona has significantly reduced its tax burden in recent years, most notably by adopting a 2.5% flat personal income tax rate. This reform cut the top marginal tax rate from 4.5% to 2.5%, simplifying the tax code and making Arizona one of the most competitive states for income taxation.”
Looking to the future, CSI pointed to the steps Arizona legislators have taken to insulate the state against capricious tax hikes, explaining “this tax structure is well protected. Rules requiring supermajorities for statewide tax increases by the State Legislature were extended in 2022 to initiatives and referendums that would have voters approve the tax increases.” The report continues, “Arizona’s competitive ranking for its tax structure is not only unlikely to get worse but may improve (even if further reform is more incremental) due simply to the relative erosion of the position of other states that lack these structural protections.”
Amid an increased flurry of attacks on Arizona’s school choice opportunities, a prominent organization is countering with the facts.
Citizens For Free Enterprise responded to another derogatory statement about Arizona’s historic Empowerment Scholarship Account (ESA) azprogram from the state’s Democrat Governor, Katie Hobbs. Earlier this week, Hobbs posted, “ESAs are rife with waste, fraud and abuse, and this will only make it worse. This empowers bad actors who are spending taxpayer dollars on ski passes, luxury car driving lessons, and grand pianos. We need accountability and transparency for this almost billion dollar program.”
ESAs are rife with waste, fraud and abuse, and this will only make it worse. This empowers bad actors who are spending taxpayer dollars on ski passes, luxury car driving lessons, and grand pianos. We need accountability and transparency for this almost billion dollar program. https://t.co/yqSMzrdGca
Hobbs was reacting to a recent news story about the Arizona Department of Education’s new policy to automatically approve a vast majority of outstanding reimbursement requests from parents in the program, which was announced by Republican Superintendent of Public Instruction, Tom Horne, at a Board of Education meeting.
The response from Citizens For Free Enterprise stated, “FACT CHECK: Arizona’s universal school choice program is a model of accountability, transparency, and security, according to CSI Institute Arizona. The over 83,000 Arizona families using ESAs just want the best for their children – and Katie Hobbs should stop attacking them.”
FACT CHECK: Arizona’s universal school choice program is a model of accountability, transparency, and security, according to @CSInstituteAZ. The over 83,000 Arizona families using ESAs just want the best for their children — and Katie Hobbs should stop attacking them. https://t.co/Law8wrNwSEpic.twitter.com/ZA1KiLdFYl
Others weighed in on the governor’s attack ahead of the 57th State Legislature, starting in January. State Representative Travis Grantham said, “I wish Democrats cared this much about government waste across the board. Why do they only care about it when it’s privatized and / or it gives the citizenry more choices?”
I wish Democrats cared this much about government waste across the board. Why do they only care about it when it’s privatized and / or it gives the citizenry more choices? 🤔 https://t.co/KQT6NowofR
Fellow legislator Austin Smith added, “Not only was Katie Hobbs education agenda rejected; she lost seats in the house and senate. Bold move Cotton, let’s see if it pays off.”
Not only was Katie Hobbs education agenda rejected; she lost seats in the house and senate.
Not everyone was opposed to Hobbs’ statement. Democrat State Representative Oscar De Los Santos replied, “From forging documents to scam taxpayers to abusing funds for luxury items, the private school voucher program is filled with waste, fraud, and abuse. Every Arizonan should be outraged. The DOGE committees should take a look at this disaster.”
From forging documents to scam taxpayers to abusing funds for luxury items, the private school voucher program is filled with waste, fraud, and abuse.
Matthew Ladner, a school choice advocate, weighed in on De Los Santos’ statements, saying, “The waste, fraud and abuse in the ESA program is a small fraction of programs you support. If you’d like to eliminate all the programs with ESA level or higher abuse you will make Ron Paul a very happy man!”
The waste, fraud and abuse in the ESA program is a small fraction of programs you support. If you’d like to eliminate all the programs with ESA level or higher abuse you will make @RonPaul a very happy man! pic.twitter.com/XeV2zw3vFn
In addition to its statement, Citizens For Free Enterprise shared a document of facts from the Common Sense Institute Arizona (CSI) to counter the myth that “ESA’s are subject to rampant fraud and abuse.” On that document, CSI highlighted that there was more than $2 billion of “Medicaid billing fraud in Arizona revealed by a single investigation into pandemic-era relaxed program standards,” and that “Arizona’s share of estimated pandemic-era fraudulent U.S. Unemployment Insurance payments” was $2.3 billion. On the flip side, according to CSI, “the sum-total of all specific, public allegations of ESA fraud …identified to-date, since universal eligibility expansion” was just around $650,000 – a far cry from the fraud in other state programs and handouts.
CSI concluded that “there are specific statutory requirements governing the use of ESA monies – including guidelines on permissible expenditures and a requirement that ADE conduct random and regular audits to ensure compliance. Within that framework, the program has been able to run well, especially compared to similar programs.”
While officials and organizations may have again successfully pushed back on Demcorats’ renewed, false detractions of the ESA program, Horne’s handling of this significant portion of the department he was entrusted to oversee continues to present major headaches for Republicans and school choice proponents. Since Horne’s first ESA Director, Christine Accurso, left the office last summer, he has been faced with a rising number of reimbursement requests and other issues that he has struggled to address with his team. Horne also capitulated to Democrat Attorney General Kris Mayes earlier this year, when she challenged him about the lack of “curriculum” attached to certain requests, adding additional regulations for parents to comply with the attorney general’s threats. Horne’s backsliding here came after he had repeatedly stood up to Mayes and Hobbs’ saber-rattling against the school choice program.
Additionally, Horne recently blamed a number of external factors, including Arizona state legislators, for the skyrocketing number of unfulfilled reimbursement requests. In a November press conference, Horne noted a fix to the ESA program that allowed parents to bypass ClassWallet to obtain reimbursements, stating, “Somebody went to the Legislature last year and got them to pass a bill saying they could do it by reimbursement… We’ve asked the Legislature, in the future, ‘Please ask us before you pass something so we can tell you what the consequences will be.’”
While the program has continued to grow over the past two years, Arizona Education Department officials have failed to satisfactorily explain why the processes put in place by Accurso before her departure were unable to suffice for smooth management and processing of reimbursements and other factors of ESA program oversight and delivery going forward. Accurso was able to save the program from massive and glaring issues created by Horne’s Democrat predecessor, adding staff to her team and reducing the backlogs to almost nothing, while accounting for an exponential increase in students and families realizing the benefits of ESAs.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona’s Senate President recently highlighted the exorbitant cost of illegal immigration to his state.
Last week, state Senator Warren Petersen shared a recent study on what the city of Denver, Colorado was spending on illegal immigration. He contrasted Denver’s “sanctuary city” approach to that just experienced by the State of Arizona, where voters passed a border security ballot measure, Proposition 314.
Petersen said, “And the media in AZ was pushing a false narrative that it would cost us money to enforce immigration laws. When in fact we save money. The cost of illegal immigration to AZ is 2 Billion. Cost of enforcement is significantly less. The voters didn’t buy the false media narrative. They passed our border security act by nearly 2 to 1.”
And the media in AZ was pushing a false narrative that it would cost us money to enforce immigration laws. When in fact we save money. The cost of illegal immigration to AZ is 2 Billion. Cost of enforcement is significantly less. The voters didn't buy the false media… https://t.co/yXwUBtvGZR
The study promoted by the Arizona legislator was from the Common Sense Institute, which showed that Denver had expended $356 million of taxpayer dollars on illegal immigrants – almost $8,000 per foreign national purportedly in the municipality, which amounts to eight percent of its 2025 budget.
According to the Federation for American Immigration Reform (FAIR), illegal immigration cost Arizona taxpayers around $3.19 billion in 2023 – an annual burden of $1,189 for each state household (or each illegal alien costing the state $5,230). As in Denver, a large share of that financial total was for educational expenses ($1.36 billion). More than half a billion dollars was shelled out for police, legal, and corrections in the Grand Canyon State.
In 2023, it was estimated that 453,000 illegal immigrants lived in Arizona, with their households sending 109,602 students to local schools.
Last month, Arizona voters overwhelmingly passed Proposition 314, which was referred to the ballot by Republican legislators earlier this year – with almost 63% of voters supporting the measure. Prop 314, which mostly is in effect now, gives local law enforcement and communities more resources to combat illegal immigration in their state and to protect innocent men, women, and children from the dangers that the open border has increasingly presented over the past four years of the Biden-Harris administration.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona home prices continue to be a major issue for people in the closing weeks of the 2024 General Election.
Last week, the Common Sense Institute Arizona unveiled its report for “Arizona Housing Affordability” for quarter 3 of 2024, sharing a “comprehensive analysis that details current challenges in Arizona’s housing market, including the ongoing housing shortage, escalating costs, and affordability issues that persist across the state.”
The report highlights that the state “is currently experiencing a housing shortfall of 65,721 units,” that “the average home price is nearly 23% higher than it would have been if prices had maintained the pre-pandemic trend,” and that “the number of building permits issued in Arizona has continued to drop, affecting the state’s ability to meet housing demand.”
“The high costs of housing in Arizona are creating significant barriers to homeownership, especially for lower-income families and first-time buyers,” said Zachary Milne, Senior Economist and Research Analyst. “While minor improvements in mortgage rates have provided some relief, the state’s overall housing deficit continues to widen, reflecting the need for housing policies that boost supply and affordability.”
CSI found that “it would take at least ten years for Arizona to resolve this [housing] deficit, that “it would still take 41 months for housing prices to fall back in line with the 2012-2019 trend if prices continued to decline at this pace [of July and August], that “new homebuyers today face nearly $500 more in monthly mortgage costs,” and that “it would take Maricopa County over 85 years to close their housing deficit.”
In a comment to AZ Free News about the report, Arizona Senate President Warren Petersen said, “It’s truly unfortunate the Governor vetoed the bipartisan Arizona Starter Homes Act and halted new home construction in two of the most booming areas in the Valley. Her actions have negatively impacted Arizona’s housing supply by contributing to the shortage, and as a result, hardworking Arizonans are having a difficult time achieving their American dream of homeownership because of skyrocketing prices. Republicans will continue to put bills on her desk to help alleviate the supply shortage next session, and we hope she will do the right thing by signing them.”
Recent polls have indicated that the issue of housing affordability is a top-three concern for many voters around the country, including in Arizona, affecting the upcoming election in November.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
A new report from the Common Sense Institute Arizona (CSI) titled the “Inflation Misery Index” was released last week. The report illustrates how unsustainably expensive it has become to live and raise a family in Arizona due to ballooning inflation under the Biden-Harris Administration. The report also breaks down the cost of living increase that has battered Arizona families since 2019 and demonstrates irrefutably that the cost of maintaining the same standard of living has risen 24% since before COVID.
In a press release from CSI, Zachary Milne, Senior Economist and Research Analyst explained, “The prolonged period of high inflation has taken a serious toll on the financial stability of Arizona’s households. Our findings highlight not only the immediate increase in costs for essential goods and services but also the long-term decline in purchasing power. As inflation continues to outpace income growth, many Arizonans are facing tough financial choices to maintain their standard of living.”
Over the past 43 months, inflation in Arizona has caused the average household to lose 24% of their purchasing power. That’s nearly $25,000 in lost income!
— Common Sense Institute Arizona (@CSInstituteAZ) October 9, 2024
Sharing the report in a post to X, CSI wrote, “Over the past 43 months, inflation in Arizona has caused the average household to lose 24% of their purchasing power. That’s nearly $25,000 in lost income!”
According to the report’s key findings, the Inflation Misery Index “holds constant consumption preferences through time,” and mathematically accounts for “normal” levels of inflation and personal income growth. The index uses 2019 as a baseline “because it precedes both the recent inflationary surge and the stimulus income received from the government in response to the pandemic in 2020.”
With these parameters in mind, CSI reported that the average person living in Arizona is compelled to spend $9,996 more per year in order to purchase the same quantity of goods and services as they did in 2019.
The report also clearly defines the increase per household: “Excess inflation over the last 43 months means the average household in Arizona must spend $24,972 more per year to consume at 2019 levels. This means that the average household has effectively lost 24% of their income to inflation.”
Broken down categorically, the inflation has impacted Arizona families in the following amounts:
$6,900 increase for housing and utilities.
$4,371 increase in food expenses.
$1,189 increase in recreational spending.
$772 increase in fuel/gasoline.
The report concluded, “It will take a prolonged period of normal or below-average (sub 2%) inflation coupled with strong income growth to recover the purchasing power lost by the post-covid inflationary crisis.” In stark contrast to the White House narrative extolling alleged slowing of inflation, the CSI wrote, “The slowing rate of inflation alone is insufficient to undo the damage caused by the rapid rise in the price level.”
For Arizonans, the dollar doesn’t go as far as it used to.
In fact, Personal Consumption Expenditures per capita increased 7.2% ($27.1 billion) in 2023, spending – 12.1% more on rent, & – 9.5% more for health care.
Just one day prior, Congressman David Schweikert (R-AZ) posted the findings of the Congressional Joint Economic Committee Republicans noting, “For Arizonans, the dollar doesn’t go as far as it used to. In fact, Personal Consumption Expenditures per capita increased 7.2% ($27.1 billion) in 2023, spending 12.1% more on rent, & 9.5% more for health care.” Schweikert noted that Arizona had the fifth highest increase.
