For the past three years, the people of Arizona have been forced to deal with the fallout of a struggling economy, rising prices, and an inflation rate that, at one point, was the highest in the country. With this in mind, Republicans got to work, delivering the largest tax cut in state history and following that up with a budget that included tax rebates for Arizona families.
But Governor Katie Hobbs clearly has much different priorities when it comes to your hard-earned money. True to her 10-year history of pulverizing Arizona taxpayers, Hobbs announced during her State of the State address in January her desire to—you guessed it—massively grow the size of state government. And judging by the executive staff hiring spree that Hobbs is on as governor, it’s clear that this isn’t just empty rhetoric…
Friday’s jobs report is not the home run that Democrats and the mainstream media claim. In their rush to champion topline job creation, they overlook how the jobs report is actually made up of two surveys. And the other doesn’t look so good, though it’s far more reflective of the economic reality facing ordinary Americans and small businesses.
The Bureau of Labor Statistics surveys business establishments and households each month to generate its report on labor market conditions. The establishment survey of payrolls produces the monthly job creation number the media is quick to champion. Yet even the BLS admits the household survey is “more expansive” because it also measures self-employed workers and those employed privately in households. This survey produces the unemployment rate.
For years, these surveys have tracked each other in terms of employment growth, as you’d expect. However, beginning in mid-2022, they began to diverge, with the payroll survey showing far more job creation than the household survey. Over the last year, the payroll survey finds 2.9 million jobs have been created, while the household survey reveals only 1.1 million new jobs.
In stark contrast to the 353,000 jobs created in the payroll survey, the household survey shows employment actually declined by 31,000 last month. Full-time jobs declined by 63,000. That’s a far cry from today’s headlines about a booming economy.
These household survey numbers are in line with other anecdotal and empirical data. On Thursday, the job placement firm Challenger, Gray and Christmas reported a historic 82,300 layoffs in January. This week, UPS announced 12,000 layoffs. Major companies such as Zerox, Spotify, and Hasbro have recently laid off at least 15% of their workforce. There’s also a jobs bloodbath currently occurring in the media sector.
On Wednesday, ADP reported that only 107,000 private-sector jobs were created in January.
There are other technical problems with the jobs report. Seasonal adjustments and annual revisions to population estimates have made January jobs reports notoriously untrustworthy. I can’t understand why we need opaque “seasonal adjustments” to the job numbers at all. Americans are smart enough to understand that job creation will be higher in some months and lower in others for seasonal reasons. We don’t need green eyeshades smoothing them for us.
Bipartisan tax cut legislation passed this week in the House of Representatives can turbocharge job creation in both surveys in the months ahead. The legislation, brokered by House Ways and Means Chairman Jason Smith (R-MO), extends key tax cuts passed as part of the Tax Cuts and Jobs Act in 2017, making it easier for small businesses to invest, expand, and hire.
This legislation is overwhelmingly supported by Main Street, with small businesses calling the immediate expensing provision “a game-changer.” The Senate should quickly pass this legislation and send it to President Biden’s desk to be signed into law.
In the meantime, let’s see if the payroll and household surveys continue to diverge in the jobs reports ahead. If they do, it will be more confirmation that the economy is not out of the woods yet.
Alfredo Ortiz is a contributor to The Daily Caller News Foundation, president and CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.
After several years of inflated budgets propped up by trillions in unsustainable COVID cash flowing to the states from the federal government, Arizona lawmakers will be coming into the new year and the new legislative session facing a potential shortfall for the budget year in excess of $400 million. Naturally, the left and their sycophants in the media have for months been decrying this to be the result of 1) historic tax cuts enacted by Republicans in 2021 and 2) the successful universal expansion of school choice in 2022. This couldn’t be further from the truth, and there are three key facts that need to be remembered when discussing the state budget and a potential funding gap.
1. The Shortfall Is a Fraction of the Arizona Budget, Nothing Like California’s Crisis
The projected $400 million shortfall represents less than 5% of the total state budget, which spends $17.8 billion this year. Far from catastrophic. Compare this to our neighbor California, facing a $68 billion dollar deficit (nearly four times the size of our entire budget), which represents 22% of their $308 billion bloated budget – up from less than $200 billion only four years ago.
Opposite to our approach, California has continuously increased taxes, having one of the highest income tax burdens in the country. They also don’t provide choice to parents and families to make educational decisions themselves. Surely, if Arizona taking less of the people’s hard-earned money and providing ESAs to all families is the cause of our small funding gap, California, doing the exact opposite, should place them in tip top shape, right?
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…
Who wouldn’t want more money in their pocket? As Bidenflation continues to crush the American people—and in particular the people of Arizona—our elected leaders should be looking for every way possible to provide relief.
Just look at the anti-tax mood among Arizona voters this past November. They rejected Prop 310, which would have increased the statewide sales tax by 0.1% to fund fire districts throughout Arizona. They voted down ill-conceived transportation taxes in Pinal County and Kingman. And they passed Prop 132 to protect against future tax increases. That should be proof enough that Arizonans want to ensure that their hard-earned dollars stay in their wallets.
Now, a new bill recently passed by the Arizona Senate would do just that…
