A group of bills introduced during Arizona’s 2026 legislative session could have imposed more than $31 billion in new annual costs on the state’s economy if enacted, according to a new analysis from Common Sense Institute Arizona and the Arizona Â鶹´«Ă˝Ół»­ Foundation. 

The annual identified 119 bills involving taxes, labor policy, energy and environmental regulations and other requirements affecting businesses. Researchers were able to quantify the potential costs of 88 of those measures, estimating a combined impact of at least $31.5 billion annually. 

If the bills had taken effect together, the report estimates Arizona could have lost 424,400 jobs, seen per-capita income fall by as much as $4,100 annually and experienced a $48 billion reduction in state gross domestic product. 

None of the 119 bills included in the report became law. 

“Arizona’s economic success is not an accident. It reflects years of policy choices that have kept taxes competitive, preserved a flexible labor environment, cut red tape, and given businesses the confidence to invest and hire here,” Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry President and CEO Danny Seiden said. “We’re fortunate none of these bills became law. If they had, Arizona’s competitive advantages could have been dramatically undermined. Arizona’s competitive position is strong, but we can’t take it for granted.” 

Among the measures analyzed was an effort to repeal Arizona’s right-to-work protections, which CSI identified as the single proposal with the largest estimated economic impact. The report projected repeal could cost the state between 30,000 and 40,000 jobs and reduce annual economic growth by 21%. 

The analysis also identified nearly $3.8 billion in potential new taxes, including proposals for an additional 3.5% tax on personal income above $250,000 and an 8% tax on income above $1 million. Other measures would have changed corporate tax policy or imposed new payroll taxes on employers. 

Labor-related proposals accounted for more than $17.5 billion in estimated costs. Those bills included mandatory paid-leave programs, changes to scheduling and overtime requirements, minimum wage increases, and additional workplace mandates. 

Another 20 bills related to energy and environmental policy carried an estimated $7.1 billion in costs. Among them were proposals requiring electric utilities to generate at least half of their electricity from renewable sources and imposing new renewable energy and battery storage requirements on data centers. 

Legal and administrative proposals accounted for another estimated $3.3 billion. The measures included rent-control policies, requirements that retailers accept cash, restrictions on pharmacy benefit managers, and other business regulations. 

Katie Ratlief, executive director of CSI Arizona, said the report is intended to examine the cumulative effect of policy decisions rather than any one proposal in isolation. 

“No single policy determines the entire direction of an economy, but policy choices compound over time,” Ratlief said. “That’s exactly why we do this analysis every year. A tax here, a new mandate there, another regulatory requirement somewhere else may not seem significant on its own. But put them all together, and the economic picture can change dramatically.” 

The report also compares Arizona’s recent economic performance with Colorado, pointing to differences in the policy approaches taken by the two states. 

According to the analysis, Arizona’s inflation-adjusted GDP has grown 20% faster than Colorado’s since 2016, reversing the relationship seen during the previous decade. Arizona’s net interstate migration since 2020 is also up 18.5% compared with its average during the 2010s, while Colorado’s has declined by more than 90%. 

CSI estimates Arizona would have about 154,405 fewer workers and $26.4 billion less in real GDP today if the state had followed Colorado’s economic growth trajectory since 2019. 

The report says Colorado has enacted at least 50 measures in recent years that CSI considers detrimental to economic growth, while legislation appearing on Arizona’s annual “Job Killers” lists has not been enacted. 

Arizona Â鶹´«Ă˝Ół»­ Executive Vice President Courtney Coolidge said maintaining the state’s competitiveness will remain important as policymakers address issues including affordability, workforce, energy and water. 

“Arizona’s competitive advantage is something we have built over decades, but it is not permanent,” Coolidge said. “As lawmakers tackle real challenges around affordability, workforce, energy and water, the answer cannot be to make it more expensive to hire people, build projects and grow businesses. We need to solve problems without sacrificing the policies that have made Arizona one of the best states in the country to invest and create jobs.” 

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This column by Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry President and CEO Danny Seiden originally appeared in the on May 27, 2026.

According to the latest  from the American Legislative Exchange Council, Arizona ranks second in the nation for economic growth over the past 10 years. During that time, we’ve ranked in the top-5 for GDP growth, domestic migration, and employment growth, clear indicators of our strength as a destination for both business and talent.

Arizona has also ranked No. 1 on the Common Sense Institute’s  every year since 2019. That growth has translated into real gains for Arizonans: more jobs, rising incomes, and the largest percentage-point decline in poverty in the country.

Despite this undeniable track record, a misguided proposal from some lawmakers threatens to wipe out a key piece of our economic toolbox at precisely the wrong time.

Specifically, they are calling for a sweep of the Arizona Competes Fund, a move that would effectively pull the rug out from under dozens of projects already underway, inflicting lasting damage on the state’s economic credibility.

A complete sweep would jeopardize 34 projects for which grants have already been committed, representing more than 21,000 potential new jobs and more than $12.6 billion in capital investment. That’s like wiping out an entire year’s worth of economic development progress.

Even more concerning, forcing the state to renege on commitments — after funds were appropriated by the Legislature — would trigger a serious crisis of confidence. If Arizona is willing to walk away from its obligations to employers and investors, why would anyone trust it to honor future commitments?

As budget negotiations continue, some have talked about eliminate the Quality Jobs Tax Credit, a program that has been key to making Arizona a magnet for corporate headquarters relocations.  reports that the Phoenix metro ranks in the top 4 for HQ relocations since 2018, projects that come with significant high-wage job gains — the type that fuel additional growth across the economic ladder.

The  is actively competing for an additional 51 HQ projects, representing more than 11,000 potential new jobs with average wages over $90,000 — demonstrating both the opportunity ahead and what’s at stake if Arizona gets this wrong.

At a moment when the state is competing for once-in-a-generation economic opportunities, maintaining Arizona’s credibility and business reputation is absolutely essential.

To be clear: Arizona’s transparent, effective economic development programs should be viewed as a model for the nation. Unlike so many of our competitor states, Arizona does not engage in opaque, backroom deals.

Instead, our programs are accountable and performance-based, with criteria outlined in statute and companies only receiving funds after they’ve filled their commitments. Arizona doesn’t place risky bets. 

These tools complement Arizona’s core advantages: a skilled workforce, modern infrastructure, and a pro-growth tax and regulatory environment.

They also deliver a strong return. Analysis from the ACA shows that companies participating in the Competes program have created more than 22,000 jobs with an average wage approaching $90,000. Those projects have generated over $1.2 billion in state and local tax revenue — meaning every $1 invested returns more than $22 to the public.

Eliminating this program would not produce meaningful budget savings. Instead, it would likely reduce future revenue by driving away jobs, wages and investment.

And if Arizona steps back, other states will step in. Competitors like Texas, Ohio and California would welcome the opportunity to capture projects that might otherwise have come here.

As Warren Buffett famously observed, it takes years to build a reputation and minutes to destroy it. Over the past decade, Arizona has earned a reputation as one of the most reliable places in the country to do business.

Lawmakers should come together to pass a responsible budget that protects and strengthens the policies driving Arizona’s growth. Arizona has spent a decade earning its reputation. Now is not the time to risk it.

Danny Seiden is the president and CEO of the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry.

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A from the Common Sense Institute Arizona (CSI) and the Arizona Â鶹´«Ă˝Ół»­ Foundation warns that dozens of bills introduced in the 2025 Arizona legislative session could have placed the state’s decade of economic growth at risk, threatening jobs, incomes, and overall competitiveness.

The 2025 Arizona Job Killers report identified 88 bills that, if enacted, would have imposed more than $45.9 billion in new annual costs on businesses, reduced employment by 660,000 jobs (a 20% decline), cut per-capita income by $4,600, and shrunk Arizona’s economy by $64 billion.

Bad bills could cost Arizona jobs

The report underscores that Arizona’s pro-growth policies since 2016—including lower taxes, smaller government, and fewer regulations—helped drive some of the nation’s strongest gains in jobs and GDP. Recent slowdowns in hiring and housing, however, coupled with the volume of “job killer” legislation considered in 2025, highlight the risks of policy missteps.

“Arizona has shown the nation what happens when states embrace policies that encourage growth,” said Courtney Coolidge, executive vice president of the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry. “But this report makes clear that the progress we’ve made is not guaranteed. The sheer number of costly bills considered in the 2025 session should serve as a warning. We must remain vigilant in protecting Arizona’s competitiveness and preserving the policies that have made us an economic leader.”

The costliest proposals

Among the most significant measures flagged in the report:

• Repeal of Arizona’s right-to-work law — projected to impose $18.6 billion in new costs and reduce employment by nearly 4% by 2033.
• New or increased taxes — totaling $3.7 billion, including a proposed 1% payroll tax on employers with more than 50 workers and a $1,000 minimum corporate income tax.
• Energy and environmental mandates — including adopting California-style vehicle emissions standards and requiring 50% renewable electricity generation by 2035, which CSI estimated would raise energy costs by billions and reduce job growth.
• Housing market interventions — such as rent control, which CSI cited as a policy with a “well-documented” record of reducing supply and harming affordability.

Lessons from Colorado

The report draws sharp contrasts with Colorado, where CSI has tracked the enactment of more than 20 “job killer” laws since 2019. Once a peer economy, Colorado has since fallen behind Arizona in both GDP and job growth. CSI estimates that if Arizona had followed Colorado’s trajectory, the state would have 113,000 fewer workers and $18.6 billion less in annual economic output today.

Katie Ratlief, executive director of CSI Arizona, said the findings illustrate the direct connection between public policy and economic performance.

“Good policy choices have helped Arizona outpace much of the country in growth over the last decade,” Ratlief said. “But as this report shows, just a handful of costly mandates could reverse those gains. The lesson from states like Colorado is clear: when lawmakers pursue policies that burden job creators, the entire economy suffers.”

While none of the 88 bills analyzed were enacted this year, the report cautions that the annual introduction of such legislation reflects a continuing risk.

CSI and the Â鶹´«Ă˝Ół»­ argue that sustaining Arizona’s economic momentum will require policymakers to reject measures that add costs, restrict growth, or erode the state’s business-friendly climate.

“Arizona stands at a crossroads,” the report says. “After a decade that brought generational change, job growth has stalled and the economy has slowed. The lessons are clear: there are pro-growth policies, and policies that hurt growth. Too often, the search for villains – developers or data centers being blamed for water shortages, or investors and short-term-rentals for housing market woes – deflects from real problems and leads to harmful policies.”

Image courtesy Pixabay and was published prior to July 2017 under the Creative Commons CC0 1.0 Universal Public Domain Dedication license

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A new policy brief by the Common Sense Institute (CSI) challenges the narrative coming from some corners that Arizona’s flat personal income tax is to blame for the state’s projected $1.6 billion budget shortfall. The report, titled Flat Tax & State Budget Myths and Facts, finds that robust revenue growth has continued since implementation of the 2.5% flat tax—and that spending, not tax policy, is the real driver behind the state’s fiscal strain.

“The data simply don’t support the claim that the flat tax has gutted Arizona’s budget,” said Glenn Farley, CSI’s director of policy and co-author of the brief. “The state has a spending problem, not a revenue problem.”

Key findings:

• Revenues remain strong: Since the flat tax was enacted in 2022, General Fund revenues have grown at an average rate of 4.5% annually, exceeding post-Great Recession averages. Arizona is bringing in $1.9 billion more today than before the tax went into effect.
  
• Spending outpaced growth: From 2022 to 2024, state spending surged by nearly 40%—more than four times the long-term trend. Had spending been held to historical averages, Arizona would be facing a $4.3 billion surplus instead of a shortfall.
  
• Cities benefited: The flat tax law also increased the share of income tax revenues distributed to cities and towns, yielding an additional $250 million in shared revenue last year alone. Local governments are currently running historic surpluses, CSI reports.
  
• Education funding increased: Despite flat or declining enrollment, per-pupil spending in Arizona public schools has climbed to a record $15,100—up 30% since FY2016 when adjusted for inflation.
  
• Economic growth is strong: Since 2015, per-capita personal income in Arizona has increased by 68%. CSI attributes this growth in part to pro-growth policies like the flat tax and tax code modernization efforts such as HB 2822.

Farley and co-author Thomas Young caution against reactionary calls to repeal the flat tax or impose new income tax surcharges. Their research estimates that reversing recent tax reforms would cost the state nearly 59,000 jobs and reduce GDP by $11.9 billion over the next decade.

“Policymakers must resist the temptation to view tax increases as a quick fix,” Farley said. “Raising taxes now would ultimately leave Arizona with fewer resources for priorities like education, infrastructure, and public safety.”

Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry President and CEO Danny Seiden said the findings affirm what the state’s job creators have long known.

“Arizona’s flat tax is doing exactly what it was designed to do—strengthen our economy, attract new investment, and put more money in the pockets of working families,” Seiden said. “This report makes clear that it’s not tax policy causing budget stress, it’s unchecked spending. We should stay the course on pro-growth policies that have made Arizona a national leader.”

As lawmakers and stakeholders debate the state’s fiscal future, the CSI report underscores the importance of disciplined budgeting and long-term economic planning. “Arizona’s flat tax was never the problem,” the authors conclude. “Unchecked spending was.” The full report is available at .

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