Think tanks and economists from across the political spectrum, as well as business community advocates, agree that if Glendale Proposition 499 were to become law it would inflict severe damage on the Glendale economy.
In addition to establishing a new minimum wage for hotel and event center workers in the city, the measure would also impose strict new regulations on employers, which experts say would drive up costs and depress visitor spending. The initiative would also require the establishment of a new labor department within the city government, forcing the city leaders either to reduce the current budget in other areas or raise taxes.
“During a contentious election season, there’s at least one thing analysts from across the political spectrum can agree on: Proposition 499 will wallop Glendale consumers and cost jobs,” Save Glendale Jobs Chair Kim Grace Sabow said. “Whether left, right, or center, there’s no denying that overnight Proposition 499 will make the Glendale tourism sector less competitive, which will put jobs at risk, cause prices to rise, depress visitor spending, and slash the sales tax revenues the city depends on for basic services. The consequences of Proposition 499 are far-reaching and severe.”
Danny Seiden, president and CEO of the Arizona Chamber of Commerce & Industry agrees.
In an interview with KTAR host Mike Broomhead, Seiden said, “It destroys the hospitality industry. It puts in a whole bunch of regulations. It creates a new bureaucracy, basically a labor relations board at the city level, and there’s no way of paying for that. So, guess what? That’s going to be a tax increase.”
The center
Common Sense Institute Arizona found that:
- Proposition 499 would reduce Gross Domestic Product (GDP) in Glendale by between $120 million and $1.9 billion.
- The city’s events and accommodation sectors would be hit hardest; together they represent an estimated 8.2% of the city’s entire economy.
- Between 1,700 and 32,000 Glendale jobs could be at risk.
The right
Writing in the election publicity pamphlet sent to Glendale voters, Goldwater Institute President and CEO Victor Riches and Executive Vice President Christina Sandefur said, “Hotels will be forced to pass the costs on to consumers, making it unaffordable to visit and spend money in Glendale. Jobs will also be threatened, because businesses cannot afford to double or triple their payroll overnight. While well-intentioned, the unintended consequences of this measure will have severe consequences for the businesses, workers, and families of Glendale.”
Statements by the Arizona Chamber and Goldwater Institute were among more than a dozen submissions in the publication that cited opposition to Proposition 499. No arguments were filed in favor of the measure.
The left
The progressive Grand Canyon Institute’s analysis also predicted cost increases and job losses if Proposition 499 became law.
As first reported by KJZZ, “He [Grand Canyon Institute Research Director Dave Wells] also said up to 5.5% of hotel and event center workers in Glendale could lose their jobs or see their hours cut, if Prop 499 passes.”
According to Wells’ review of the measure, in addition to higher room rates and depressed occupancy levels, “Upward pressure on prices at concessions at major Event Centers like Desert Diamond Arena and State Farm Stadium will likely be about 6%.”
The economists
An analysis from Applied Economics finds that Glendale could be slammed with a loss of between “$1.4 million to $2.9 million in cumulative declines in sales tax collections over the next five years from lower hotel occupancy and corresponding reductions in visitor spending” if Proposition 499 were to pass.