The Common Sense Institute of Arizona (CSI) released a report Wednesday which outlines the implications and economic impact of the City of Glendale’s far-reaching “Hotel and Event Center Minimum Wage Protection Act” (Prop 499). The act is set to be considered by voters on November 5.
The initiative, launched by the non-profit organization “Worker Power Political Action Committee,” has been challenged by the City of Glendale on the basis that it violates the State of Arizona’s “Single Subject Rule” limiting initiatives to act upon a single issue, The case is now headed to the State Supreme Court according to AZ Central.
The report from CSI Arizona details that the initiative, if it becomes law, would mandate that hotel and event center employers pay their staff a minimum of $20 per hour, and places narrow restrictions on the duties they may perform and the duration for which they may perform them. As Brunner explains, “For example, it prescribes how many square feet can be cleaned in a hotel before the employer is required to pay twice the room attendants’ regular rate of pay for each hour worked during that workday, and establishes new requirements on how Hotel and Accommodation firms treat certain revenues and records.”
The act would furthermore require the City of Glendale to create an entirely new enforcement division in order to enforce the mandate and hire staff to conduct investigations. It would also price non-union labor out of the market per the report.
The CSI found that the new law, if enacted, would, “reduce Gross Domestic Product (GDP) in Glendale by between $120 million and $1.9 billion.” Given that the city’s event and accommodation industries account for approximately 8.2% of Glendale’s entire economy, the blow to the city’s tax base could be severe.
“Depending on how the industry responds to the new policies, between 1,700 and 32,000 Glendale jobs could be impacted. Impacts will range from the elimination of existing jobs subject to the new rules, to reduced work hours, to the movement of jobs outside the city. How much of each and when will determine where things fall in this range.”
In a post to X, the CSI explained, “The Minimum Wage Act would impose significant costs on the city of Glendale, requiring the creation of a new Department of Labor Standards to enforce the Act’s provisions. CSI estimates the city would need to spend $995,000 to $1.9 million annually to manage these new requirements.”
The Minimum Wage Act would impose significant costs on the city of Glendale, requiring the creation of a new Department of Labor Standards to enforce the Act’s provisions. CSI estimates the city would need to spend $995,000 to $1.9 million annually to manage these new… pic.twitter.com/rcKG0S2L9h
Compellingly, the CSI report referecnces similar policies put in place around the country as “instructive examples,” of the likely ramifications of enacting the restrictive law.
“This year California instituted a $20 per hour minimum wage for fast food workers leading restaurant owners to reduce staff hours, lay off part-time staffers, and limit overtime pay. Also this year, Long Beach, CA passed a ballot initiative instituting a $23 per hour minimum wage for hotel workers. On the consideration of increasing hotel and airport workers’ minimum wage to $25 per hour, the President of the Valley Industry and Commerce Association said ‘increasing the hourly wage by $6 or $7 this year alone could cost an employer about $14,000 more per worker.’ For Arizona to pass a $20 minimum wage for hotel and event center workers in Glendale, it could cost employers up to $10,756 per affected worker -through a combination of either direct increased wage costs or efficiency losses as employers mitigate the impacts by reducing staff, cutting hours, or moving business activity. Much of this cost will likely be passed onto consumers in the form of higher prices and increased fees (as has been the case in California). This may further incentivize both customers and operators to seek alternatives outside the city.”
With Glendale and the city’s businesses banking heavily on the much ballyhooed Mattel Adventure Park at the VAI Resort set to open in late 2024, according to a park representative, and the growing impact of the Westgate Entertainment District and State Farm Arena on the local economy, the impacts of this measure could be devastating.
Arizona’s Energy Competitiveness Index was released Friday by the Common Sense Institute of Arizona (CSIA) and despite skyrocketing electrical rates, Arizona’s energy reliability and competitiveness have reportedly fallen since 2022. With businesses and families buckling under the strain of higher rates passed by the Arizona Corporation Commission in March, the state and nation are pivoting further away from reliable natural gas and nuclear power toward more intermittent solar and wind solutions. And the outcome seems to be hurting Arizona families.
According to the report, “Arizona’s relative affordability has improved compared to other states. The state now ranks 21st in residential electric affordability, up from 28th in 2011.” But legislators and regulators shouldn’t celebrate much. This isn’t simply because Arizona has gotten better, but also because almost every other state has gotten much worse.
The CSIA report found in part, “The reliability of energy grids across the country is on the decline, although Arizona remains one of the more reliable grids in the country. On average, a user of electricity in Arizona faced 136.9 minutes of interruption in 2022 – up from 73.9 minutes in 2013, and nearly 59% less than the duration faced by the average customer across the U.S. (333 minutes). Despite falling slightly in the two reliability competitiveness indices, Arizona still ranks 5th in reliability.”
⚡ Despite a national decline, Arizona's energy grid remains one of the most reliable! In 2022, the average Arizonan faced only 136.9 minutes of interruption, compared to the national average of 333 minutes.
— Common Sense Institute Arizona (@CSInstituteAZ) July 29, 2024
However, the report added, “Both the electricity and natural gas prices faced by residential, commercial, and industrial customers in Arizona have increased in the last 13 years, but have also become more competitive as other states experienced larger increases. Arizona now ranks 21st in residential electric affordability, up from 28th in 2011.”
The report shows in detail that since peaking in 2022 at a score of 82.9, Arizona’s competitiveness index has dropped precipitously ending at 79 in 2023.
As noted by the Common Sense Institute: “Arizona’s Energy Competitiveness Index was 77 in 2011, peaked in 2022 at 83, and then declined to 79 in 2023. An increase in the Energy Competitiveness Index is a positive qualitative change – i.e., the state is more competitive as the index approaches one hundred. While the headline index extends through 2023, data for some of the individual component metrics are not available for the entirety of the period covered. For those metrics, we present the results through the latest year of data available.”
In regard to capacity, the report reveals that Arizona’s generating capacity, referred to as “nameplate capacity” increased from 2019 to 2022 but has barely kept pace with population increases and has declined considerably since peaking in 2012. The report noted, “Arizona has experienced a large increase in its population in recent years due to high levels of net migration. Because power plants typically take several years, if not a decade or more to complete, nameplate capacity has not increased as much, thus the decrease in nameplate capacity per 100,000 residents.”
From 2011 to 2023, Arizona's overall energy competitiveness ranking jumped to 21st, with improvements in six out of ten key indices.
— Common Sense Institute Arizona (@CSInstituteAZ) July 26, 2024
The Common Sense Institute offered a stark warning that, “While the goals of implementing a more environmentally friendly energy system have merit, policymakers should take caution not to recklessly transition their energy grids to renewable sources too quickly, and without appropriate supporting infrastructure. Renewable transition elsewhere, namely in states like California and Texas, has proven to be both costly and at a detriment to reliability and competitiveness.“
Should Washington and Phoenix continue to plunge headlong down this path, it seems unlikely that Arizona’s energy outlook will remain sunny.
In a Monday morning press conference, the Common Sense Institute Arizona (CSI) announced the release of its comprehensive report on “Arizona’s Ongoing Fentanyl Crisis,” for 2024. The prognosis for the state of Arizona is grim with the report detailing the rapidly mounting cost of the fentanyl epidemic in economic terms. From 2015 to 2019 Arizona’s Department of Health Services reported opioid-related encounters in Arizona hospitals skyrocketed from 41,400 to 56,600, an increase of 37%. And the economic cost has leapt to a staggering $58 billion. The US Drug Enforcement Agency has also reported the total seizures of fentanyl in the nation jumped from 6,800 pounds in 2019 to 29,200 in 2024 or by about 320%.
In other key findings published by the Institute, the study found that nationally, the opioid epidemic cost the American people as a whole almost $1 trillion in 2017, with $22 billion of that falling on Arizona alone, and the situation has only become worse in the intervening seven years. Despite the incidence of opioid-related fatal overdoses seeming to peak, they’ve really more plateaued, holding steady at a near all-time high with declines that “have been modest,” and the institute warns “it is premature to assume success in dealing with this crisis.”
🚨 The DEA seized enough fentanyl in Arizona alone to kill every Arizonan 14 times over, if the seizures were of pure fentanyl and assuming a potentially fatal dose is at least 2 mg.
— Common Sense Institute Arizona (@CSInstituteAZ) June 25, 2024
Turning to the medically focused economic impact of the crisis the institute cited CDC modeling of economic costs associated with use-disorder and fatal overdose with the Arizona Department of Health Services reporting over 56,600 opioid hospital encounters at a total cost to the state system of $676 million working out to about $12,000 per medical encounter.
Touching tangentially on the Biden administration’s border policies, the report also noted that “border states have begun to experiment with enforcement of border security – a role traditionally filled by federal authorities,” and observed that Texas has allocated over $5 billion toward the border while Arizona’s expenditure peaked in 2022 under Republican then-Governor Doug Ducey at $560 million.
The institute wrote, “Considering these figures through 2023 and based on state-reported changes in the rate of opioid use and overdose, inflation, and other cost changes, CSI estimates that the cost of the opioid epidemic in Arizona reached an all-time high last year – a staggering $58 billion. This is more than double the $22.5 billion estimated by the CDC in 2017 when then-Gov. Doug Ducey declared the opioid epidemic a public health emergency. The surge appears almost entirely attributable to the rise in fentanyl abuse since then, the source of which appears to be Arizona’s porous southern border.”
Glenn Farley, Director of Policy and Research said in a press release sent to AZ Free News, “The fentanyl crisis is not just a public health issue, it’s also a significant economic and social challenge that affects all Arizonans. The $58 billion cost to our economy is staggering and our report aims to provide a comprehensive understanding of the crisis to better inform policymakers and the public on what we are truly dealing with.”
With the increase in border security expenses and the medical fallout being accounted for, the obvious final element is the most prevalent in lower income neighborhoods as well: crime. Fentanyl addiction of course brings medical crisis and death, but first it often brings a rapid downward spiral into crime, misery, family dissolution, homelessness and violence that has touched nearly every family in Arizona and the nation writ large.
The institute explains, “In 2017, then-Gov. Ducey declared opioid misuse a statewide public health emergency. At the time there were 950 fatal opioid overdoses occurring annually. Today, the number is nearly 2,000 fatal overdoses every year. Crime, too, is on the rise – in Arizona and nationally. Since 2014 the violent crime rate in Phoenix has risen 38%. According to estimates, 25%-50% of all violent crimes are drug-related. Homelessness, too, is on the rise – and despite massive investment, resources are mostly targeted towards housing and shelter, even as homelessness is highly correlated with drug abuse and dependence. Police resources in Arizona have failed to keep pace with the rising demands created by the border, drug, and homelessness crises.”
The report concludes with a chilling reminder that the cost of the opioid epidemic in Arizona is still rising, citing “inflation, widespread availability of the drug at very-low street prices, and continued high incidence of opioid use disorder among Arizonans combined.” As an analysis, the report is thorough and comprehensive in all but one respect which an academic finding cannot possibly satisfy and CSI rightly doesn’t attempt: the crushing, devastating, and brutal human cost that only someone who has lost a loved one to this plague can truly understand.
The study does however, conclude on an appropriately cautionary note: “The battle with fentanyl – in Arizona and nationally – is far from over.”
As the Arizona Legislative session may be nearing its final stretch, the state’s premier business organization is highlighting bills that would have had grave consequences for jobs.
On Wednesday, the Arizona Chamber Foundation and the Common Sense Institute released a report, showing that “67 failed bills from the 2023 legislative session in Arizona” would have cost the state’s economy $9.5 billion and deprived individuals of 113,500 jobs. According to the report, those bills would also have “imposed over $25 billion in annual new costs on Arizona’s businesses, including $15 billion in new taxes and fees.”
The two organizations compared Arizona’s path to our neighboring state of Colorado – if the Grand Canyon State would have passed any or all of the 67 bills of note. They reveal that 13 bills that failed this year in Arizona, “have actually passed in Colorado.”
TALE OF TWO STATES: according to our newest report, @CSInstituteAZ finds if Arizona had followed a similar policy path as our neighbor #Colorado, Arizona would have 113,500 fewer workers and an economy that was $9.5B smaller.
— Common Sense Institute Arizona (@CSInstituteAZ) July 12, 2023
Danny Seiden, the President and CEO of the Arizona Chamber of Commerce and Industry issued a statement in conjunction with the report, writing, “At the Arizona Chamber, we are committed to protecting the job gains we have seen in Arizona in recent years. This analysis provides important data points for legislators to consider as these failed bills will likely resurface in future sessions.”
Katie Ratlief, the Executive Director of Common Sense Institute Arizona, also weighed in on the announcement, saying, “This study shows that policy matters when it comes to jobs and economic impacts. Policymakers and the public should be informed about the short and long term impacts these pieces of legislation have so they can weigh pros and cons and make informed decisions.”
AZ Free News reached out to Arizona Senate President Warren Petersen, one of the key forces behind killing these bills throughout the still-ongoing session, to respond to the report. Petersen said, “This is a great example of why policy matters. Arizona has built on years of sound policy under Republican leadership that has helped grow our state’s economy. We’ll continue to do everything we can to protect Arizona citizens and our economy from the type of policies that have negatively impacted Colorado.”
House Speaker Ben Toma, another stalwart defender of conservative principles in the Legislature, added, “The far left has tightened its grip on the Democrats in Arizona and it shows in the bills they introduced this session in the State Legislature. They propose business and environmental regulations that would stymie growth, kill jobs, and make energy costs higher. In my term as Speaker of the House, I will continue to work to stop these policy proposals so we can continue to be a state on a positive trajectory with low taxation, high growth, and maximum freedom.”
Freshman Republican Representative Matt Gress shared his thoughts on the report in a tweet, stating, “POLICY MATTERS. Arizona succeeds when leaders trust people over government. @CSInstituteAZ’s report reveals that some politicians think they know better than you with terrible ideas like, tax hikes, higher energy costs to fund more ‘green’ regulations, greater compliance with the ‘Mother, may I?’ administrative state. That’s everything Arizona is not.”
POLICY MATTERS. Arizona succeeds when leaders trust people over government.@CSInstituteAZ’s report reveals that some politicians think they know better than you with terrible ideas like:
❌ tax hikes ❌ higher energy costs to fund more “green” regulations ❌ greater compliance… https://t.co/PzSmQohdDD
Democrats claim a new program will bankrupt the state. The opposite is true.
Is school choice bankrupting Arizona? That’s what Gov. Katie Hobbs and Democratic legislative leaders would have you believe, but simple math says otherwise.
Arizona’s choice program, Empowerment Scholarship Accounts (ESAs), “in its current form is not sustainable,” Ms. Hobbs tweeted last week. “We need to bring an end to this out of control and unaccountable spending, and I will work tirelessly to make that happen.”
With an ESA, parents can use a portion of their child’s state education funds—typically about $8,000 a year—to pay for private-school tuition, tutoring, textbooks, online courses, home-school curricula, special-needs therapy and other expenses.
Ms. Hobbs’s declaration came in the wake of the Arizona Department of Education’s latest projection that the program, which has about 58,000 participants, will serve 100,000 students by the end of fiscal 2024 at a cost of roughly $900 million.
“Without reform, Empowerment Scholarship Accounts will bankrupt our state & our public schools,” tweeted Rep. Andrés Cano, leader of the Democratic caucus in the Arizona House. He omitted the portion of the department’s letter noting that “many of the students that are enrolling now are coming from the public school system, which in the end saves the state money.”
That $900 million is barely 2% of total Arizona state spending of $80.5 billion in 2022. Arizona public schools spend about $14,000 per pupil, or $1.4 billion for 100,000 students. If the department’s enrollment projection is reached, school choice would serve roughly 8% of Arizona’s students for 6% of the $15 billion that Arizona will spend on public schools.
A new report by the Common Sense Institute finds that “current enrollment in Arizona public district and charter schools combined is over 80,000 students below pre-pandemic projections,” producing a savings of $639 million. Arizona’s population is growing, so the vast majority of those students left for private or home schools, for which they could avail themselves of Arizona’s two private choice policies. In addition to the 58,000 students using education savings accounts, last year school tuition organizations issued more than 32,000 tax-credit scholarships.
The attacks on school choice are more than a public relations campaign. When Ms. Hobbs’s budget retained last year’s school-choice expansion, Arizona’s Attorney General Kris Mayes used the “bankrupt the state” talking point as a pretext to threaten a lawsuit. In a public letter to Ms. Hobbs and the Legislature, Ms. Mayes decried the “catastrophic drain on state resources caused by universal Empowerment Scholarship Accounts.” She later went on television and threatened to investigate participating families for “waste, fraud, and abuse.”
Ms. Hobbs lacks the legislative support to roll back school choice, as Republicans have slim majorities. But she’s signaling what she would do if she could. Arizona families should take note.
Mr. Bedrick is a research fellow at the Heritage Foundation. Mr. DeAngelis is a senior fellow at the American Federation for Children.
