by Matthew Holloway | Jan 16, 2025 | Economy, News
By Matthew Holloway |
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.
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.”
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.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Daniel Stefanski | Jan 5, 2025 | Economy, News
By Daniel Stefanski |
Arizona Republicans highlighted their state’s low tax rate after a recent signing of a baseball star with the hometown team.
Late last month, Corbin Burnes, a free agent pitching star, decided to sign with the Arizona Diamondbacks, shocking most onlookers, who had predicted that he would likely end up with another Major League Baseball suiter.
One report shared that Burnes made his decision based on Arizona’s lower tax rate. Burnes had been wooed by the Toronto Blue Jays and San Francisco Giants – two jurisdictions with significantly higher taxes than the Grand Canyon State.
Arizona Senate President Warren Petersen said, “Sports players choose AZ over other states because our taxes are lower. Businesses do the same.”
Former Arizona Governor Doug Ducey added, “I’ll be looking forward to watching Corbin Burnes in a Dbacks jersey next year – and very glad to see that Arizona’s lowest flat tax in the nation is what brought him to AZ! Sorry Gavin Newsom [&] Justin Trudeau!”
Burnes had been reportedly offered more money by the aforementioned teams before deciding to ink a deal with the Arizona Diamondbacks.
According to a post on X, the top tax rate in California is 14.4%, and the top federal and provincial tax rate in Toronto, Ontario is 53.53%. Arizona’s tax rate is 2.5% in comparison.
Arizona owes its low tax rate to the work of Governor Ducey and legislative Republicans, who enacted the transformational tax bracket in 2021.
Two staunch free-market advocates, Tim Phillips (President of Americans for Prosperity) and Grover Norquist (President of Americans for Tax Reform), wrote a piece in Newsweek, praising the accomplished feat of the Arizona Legislature, spearheaded by State Senator J.D. Mesnard and Ducey. They stated, “Arizona, on the other hand, provides a good example: lower the tax rates to let people keep more of what they earn and invest in what they care about most. Limit government spending to grow no faster than the incomes of the citizens who pay the taxes. Create a magnet for job-creating investment and hardworking Americans who simply wish to be left alone to work hard, take care of their families and support their communities.”
Phillips and Norquist added, “The Arizona reform is a positive model and one that should be followed by other states and the federal government.”
When the Arizona Supreme Court gave the green light for these tax reforms to go into effect, Arizona Free Enterprise President Scot Mussi said, “Today’s decision from the Arizona Supreme Court is a big win for taxpayers in our state. The legislature passed historic tax cuts last year that benefit all Arizona taxpayers. It’s time for Invest in Arizona and out-of-state special interest groups to accept this reality and stop making a farce of the referendum process.”
Mesnard touted the progress of his historic legislation in a campaign newsletter in January 2023, saying, “The historic tax reform that I championed in 2021 is now in effect for income earned this year – a full year ahead of schedule thanks to strong government revenues. Valued at more than $2 billion, this reform reduced individual tax rates to 2.5%, resulting in a tax cut for every single Arizona family and Arizona having the lowest flat tax in the nation.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by AZ Free Enterprise Club | May 3, 2024 | Opinion
By the Arizona Free Enterprise Club |
A strong economy is a key piece of the foundation for any society. But while the Biden administration has been busy doing anything it can to destroy the economic climate in America over the past four years, Arizona is set up for success—not just for today, but for decades to come.
Last month, the American Legislative Exchange Council (ALEC) released its latest “Rich States, Poor States” report, and the Grand Canyon State received the number three ranking for economic outlook among all 50 states. Such a high rank is impressive enough on its own, but when you consider that our state was ranked 13 back in 2021, Arizona’s dramatic rise up the chart especially shines. So, how did we get here?
Pro-Growth Policies Have Led the Way
Arizona’s high ranking is a direct result of significant pro-growth income and property tax reform that have supercharged our economy. In just the last decade, we have cut taxes on capital gains and drastically reduced the property tax burden on small businesses. Then, in July 2021, the Free Enterprise Club helped lead the charge as the Republican-led legislature passed a 2.5% flat tax, delivering historic tax cuts for every single Arizona taxpayer. And if that wasn’t enough, Republicans also included tax relief for Arizona’s families in last year’s state budget to help with the growing cost of gas, groceries, housing, and energy under the Biden administration.
Each of these pro-growth policies have set up Arizona as a leader in the country with many other states looking to mirror these reforms, but if the left had gotten its way, we never would have been here.
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Oct 23, 2023 | Opinion
By the Arizona Free Enterprise Club |
Last week, the Joint Legislative Budget Committee (JLBC) released an updated state revenue forecast showing that Arizona may be facing a $400 million budget shortfall next year. And as predictable as the sun rising in the East, Democrat politicians and their friends in the media went on the attack, blaming the deficit on two historic reforms despised by the left—universal school choice expansion and the 2.5% flat tax cut passed in 2021.
For the Democrats and their sycophant media allies, the problem is always too much parental choice in education and letting taxpayers keep more of their hard-earned money. Yet this narrative couldn’t be further from the truth. A closer look at Arizona’s budget and the projected budget deficit reveals that we have a spending problem, not a revenue problem…
Projected Budget Shortfall Is a Spending Problem
Just 5 years ago, the legislature enacted the FY 2019 budget that included $10.1 billion in on-going spending, plus $500M in “one-time” expenditures ($10.7 billion total). By last year, that number had exploded to nearly $15 Billion in ongoing spending, a 50% growth in ongoing spending in 5 years! The most recent budget negotiated with Democrat Katie Hobbs earlier this year kept ongoing spending at a lower trajectory but included “one-time” outlays that brought the total budget cost to $17.8B…
>>> CONTINUE READING >>>
by Jeff Caldwell | Oct 21, 2023 | Opinion
By Jeff Caldwell |
On Wednesday, October 11, Arizonans learned the budget Katie Hobbs signed into law will possibly have a $400 million shortfall. This means the state won’t have enough money to fund the budget because it’s too big and is spending too much money.
The left wants to blame the budget shortfall on the implementation of former Governor Ducey’s state income flat tax a couple years ago. They also demonize the families participating in the state school choice ESA program. However, if it weren’t for Hobbs’ spending increase of $2 billion and vetoing a $2 billion smaller budget, the state would still have an outlook with a budget surplus.
Let’s review the short history.
In June of 2022, Arizona Governor Ducey signed into law the Fiscal Year 2023 Arizona Budget. The Radical Left and then-Secretary of State Katie Hobbs praised that budget for being bipartisan.
Moving ahead to the most recent 2023 legislative session, Arizona Senate President Warren Petersen and Speaker of the House Ben Toma wanted the new legislature to prioritize their most important responsibility — the state budget. Accordingly, in February, the state legislature passed a continuation of the same $15.8 billion budget from 2022.
Hobbs vetoed it. The budget Hobbs vetoed is the same as the one she applauded after Ducey signed it into law. This year, Hobbs called the budget partisan and extreme. The budget Hobbs decided was good enough to sign into law was $17.8 billion, exactly $2 billion larger than the budget she vetoed.
Hobbs insisted on a budget that is $2 billion larger even while many economists predicted Arizona and the nation are at risk for an economic slowdown due to rising interest rates. Forbes reported, “At the end of 2022, the National Association of Realtors predicted a 15.8% drop in combined sales and prices for the Phoenix-Mesa-Scottsdale [housing] market in 2023.”
The Federal Reserve, the nation’s central bank, currently shows the median home price in the United States is collapsing faster than any other point in recorded history.
If a recession occurs, Arizona will see less tax revenue. This would also have a negative impact on the budget’s revenue because people are spending less money; therefore, the state is collecting less in taxes.
While the Radical Left wants to blame the budgetary shortfall on the flat tax that benefits everyone, one thing is clear. The state of Arizona is spending too much money, and Hobbs’ extra $2 billion budget is destroying Arizona. It is her fault.
Jeff Caldwell currently helps with operations at EZAZ.org. He is also a Precinct Captain, State Committeeman, and Precinct Committeeman in Legislative District 2. Jeff is a huge baseball fan who enjoys camping and exploring new, tasty restaurants! You can follow him on X here.
