This is the season when, naturally, we’re thinking about the year that was and the 12 months to come.
First, a few reflections on 2024 from my perch leading the Arizona Chamber of Commerce & Industry.
Job attraction
Divided state government perhaps offers fewer opportunities for big legislation that will influence Arizona’s future in a profound way, but don’t sleep on the state Legislature and Gov. Hobbs reaching an agreement to extend the Arizona Commerce Authority. It’s arguably the country’s most effective economic development agency, racking up jobs wins with such frequency that we risk taking ACA CEO Sandra Watson and her team for granted. That would have been a big mistake.
There was a time in the not-too-distant past that investments in the tens of millions of dollars would garner big headlines. Now Arizona competes for—and wins—investments in the billions. The ACA has elevated the state into the big leagues of job attraction, putting to work the tools given to them by successive legislatures and governors. I’m glad lawmakers and the governor in 2024 ensured the ACA will continue its indispensable work.
Regulatory crush
Even the best state economic development agency can only do so much if it’s handcuffed by federal regulations. The Chamber throughout 2024 spent an inordinate amount of time focused on regulations from Washington that were putting the state’s ability to continue to grow at real risk.
The Arizona business community and regulators at the Environmental Protection Agency agree on much: We want clean air and water and healthy communities. Where we disagree, often strongly, is on the best way to achieve those goals. Sometimes, we can’t even agree on the basic facts, including on whether pollutants originate in Arizona or from sources far beyond the state’s borders. In 2024, that conflict sometimes played out in the courtroom.
One of my hopes for 2025 is that the state and the feds can reach some reasonable equilibrium. Arizona businesses have proven they’re willing partners in the effort to improve our air quality. I hope the EPA will join us.
Meeting demand
APS and SRP in August met record demand for electricity, eclipsing their previous demand records set in 2023.
Arizona utilities’ ability to continue to meet an ever-growing demand for power is nothing short of astonishing, and yet I believe it’s still an underreported story. Trust me, if there were to be an extended outage in the summer months, you’d hear about it plenty. But we’ve come to expect the A/C to click on when we need it.
The level of reliability Arizonans enjoy from their utilities is thanks to smart planning, year-round maintenance, and wise investments in new energy infrastructure.
But let’s give credit where it’s due. Not only should we thank our utilities for their excellent work, but the strategies they deploy are made possible in part by the members of the Arizona Corporation Commission. They look out for ratepayers while ensuring customers’ continued access to a dynamic mix of energy sources and a reliance on market forces.
The alternative? Look next door to California, where strict mandates and heavy subsidies for specific renewable resources have driven up costs and diminished grid reliability.
Voters prioritize quality of life
The election dealt us a few surprises, but the business community’s crystal ball was clear when it predicted that Maricopa County voters would continue the sales tax that funds transportation infrastructure projects in Arizona’s most populous county.
There should be a healthy tension in politics between spenders and savers, so credit to Proposition 479’s critics who worked hard to send voters a responsible, fiscally sound proposal on their November ballot.
But voters didn’t buy the doom and gloom about a tax they’d already been paying for decades and that had delivered one of the country’s best freeway systems.
Election years give voters a choice, and in 2024 we were reminded that – especially at the local and county level – voters will choose to maintain or improve their quality of life, and they’re willing to pay for it.
The year ahead
A few thoughts on politics and policy as we open 2025.
Elected officials, don’t overread your mandate. You may have won your race, but it’s probably not because voters want you to pursue the most extreme ends of your political wish list. Leaving your most rabid supporters a little disappointed isn’t a bad thing; it usually means you’ve spent more time focused on the core responsibilities of your job and less time attempting to go viral.
Easy on the tariffs. After renegotiating the North American Free Trade Agreement in his first term, President Trump is now saying the successor United States-Mexico-Canada Agreement needs a complete overhaul and that huge tariffs should be slapped on imports, including on those goods originating in Canada and Mexico.
Tariffs are taxes paid by importers and passed onto consumers. Unless the president-elect wants to usher in a giant tax increase on the American people and wreak economic havoc across North America, he’ll rethink this campaign promise.
Extend the tax cuts but consider the effects on states from all angles. The president-elect intends to extend the expiring elements of his 2017 Tax Cuts and Jobs Act. Maintaining lower marginal tax rates and continuing to encourage investment in new machinery and equipment are smart. But the White House and Congress will need to ignore some bad ideas floating around the Beltway.
For one, don’t go back to allowing taxpayers in big spending states to deduct a larger share of their state taxes on their federal tax returns. If California and New York taxpayers don’t like the lower SALT cap, they can elect new leaders at a state and local level.
Second, be careful about where you look for savings. Cutting federal matching funds that flow to states to manage their Medicaid programs, for example, would represent a huge cost shift to states, threatening not only coverage levels and payments to providers, but state budgets broadly, risking the diversion of funds from other critical priorities such as education, infrastructure, and public safety.
No more goodbyes. We said goodbye to our National Hockey League franchise in 2024. The convoluted transaction keeps the door open for the team to restart someday in Arizona, but in the near term, we’ll be without top-flight hockey.
I opened this column by commending leaders for not taking the state’s job attraction team for granted. Hockey’s departure from Arizona is a reminder not to take our pro sports teams for granted, either.
There’s nothing written in stone that says the NFL, NBA, and MLB have to keep a home in Arizona. In 2025, policymakers can take a big step in ensuring pro sports continue to thrive here.
Here’s to a happy, healthy, and prosperous New Year.
Danny Seiden is the president and CEO of the Arizona Chamber of Commerce & Industry.