With the passage of a $1.9 trillion COVID relief package and promise of a historic multi-trillion- dollar infrastructure package, Arizona is poised to experience a rapid influx of federal funds.

Arizona economist Jim Rounds is optimistic about this investment, and believes that it could give Arizona lawmakers and policy minds the opportunity to chart a more positive post-pandemic economy. 

“We can hedge against the bad and take advantage of the good with solid economic policies,” Rounds said . “We stepped it up after the Great Recession. We need to take another giant step post-COVID.”

The American Rescue Plan $4.3 billion in state fiscal relief, $3 billion in local fiscal relief, and $2.6 billion in relief for education.

Despite from prominent national economists like Larry Summers, former U.S. Treasury Secretary and President Emeritus of Harvard University, about economic overheat, Rounds is more concerned about the “ridiculous” amounts of debt being piled on,. “The biggest issue with borrowing so much is that we have to pay it back eventually,” he said.

Indeed, American debt as a percentage of GDP from 107% at the beginning of 2020 to approximately 130% today. This figure was around 118% at .

“I’m not overly concerned, yet, about inflation,” Rounds said. He predicts that the inflationary pressures applied by the expansion of federal spending will result in higher mortgage costs in Arizona and higher interest rates across the nation. These forces would counteract rising inflation.

Overall, he is disheartened by the perceived lack of empirical evidence guiding the American Rescue Plan. “I’m more disappointed in the lack of research into the needed scale of the stimulus package. The best economic stimulus package continues to be COVID-19 vaccines.”

He argues that the expansion of vaccine availability will increase demand, naturally stimulating the economy. Arizona has been on vaccine distribution and recently to everyone above the age of 16. Cases and hospitalizations have .

Incoming infrastructure and climate investment

President Biden and congressional Democrats are now eyeing a federal infrastructure and climate package, as Biden promised on the campaign trail. While the details are still being hammered out, it is likely to amount to several trillion dollars in spending.

Rounds is very optimistic about the possibilities for Arizona’s growth if a package passes and is signed into law. 

“The climate package needs to be well considered. There’s a difference between heavy regulation and finding a balance between public and private sector preferences,” he said. “In fact, many larger businesses have started listing environmental issues as a key in their strategic plans.”

According to Rounds, Arizona can help lead the next generation of clean power generation. “Proper planning can actually generate jobs in states that take the lead in being the producers of related environmental technology goods and services. Arizona can be such a state if we can draft some form of a strategic plan in this area.”

The post Arizona economist sees promise, expresses concern as federal aid flows in appeared first on Â鶹´«Ă˝Ół»­.

As Covid-19 continues to take its toll on Arizonans’ health and impact hospital capacity, many citizens have no plans to get immunized even though an effective vaccine is available, recent indicate. 

That’s alarming to the medical community and business groups that came together this week to discuss the economic impacts of getting vaccinated — or not. 

Vaccines are one of the nation’s most important “economic development” tools to prevent the societal and financial costs that come with disease outbreaks, said Arizona economist Jim Rounds, who spoke at the event entitled, How Vaccines Impact Arizona’s Economy. 

“That’s the most cost effective, highest return on investment, economic development project we have ever seen in this country and it has to do with distribution of vaccines,” Rounds said.

AZBio () and a coalition of health and community organizations hosted the discussion to highlight the importance of vaccines to the state’s health and welfare. 

Fifteen medical and business organizations sponsored the event including the Arizona Chapter of the American Academy of Pediatrics, Arizona Academy of Family Physicians, Arizona Nurses Association, Arizona Medical Association, Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry, Children’s Action Alliance, Grand Canyon University, and Greater Phoenix Leadership.

Duration of economic recovery depends on vaccination rates

To put the pandemic’s economic impact in perspective, Rounds compared the pandemic recession with the Great Recession of 2008-09. 

About 7 million jobs were lost in the Great Recession. More than three times that amount, 22 million, were lost during the height of the Covid recession last year.  

Arizona is seeing quicker recovery than other states when it comes to jobs, he said. But certain groups, particularly low-income individuals, are disproportionately affected by the recession, he said.  

“A recession ends when the vaccine is widely distributed,” Rounds said.

To achieve full economic recovery this year, the state will need to vaccinate 20,000 to 30,000 people daily, he said. Currently, only about 8,000 a day are being vaccinated.  

Human and financial costs of not getting vaccinated

Of concern is a growing anti-vaccination movement that is largely based on misinformation, Rounds said. 

Arizona already has one of the lowest childhood vaccination rates, which is “unacceptable,” he said.

“We need to rely on science and research, not dogma,” he said. 

To illustrate the human and financial costs of not getting vaccinated, Rounds referred to research by the Centers for Disease Control that estimates that among children born in the last 20 years, vaccinations prevented more than 21 million hospitalizations and 732,000 deaths.

Another study by the American Academy of Pediatrics on children born in 2009 revealed that compliance with the recommended vaccine schedule would represent $68.8 billion in savings to society, Rounds said.

“The Covid-19 pandemic is a reminder that we have to be diligent with getting information out there and we have to continue to advance science and research to attack these problems.”

Other speakers at the event were: 

• Chandler physician Dr. Andrew Carroll talked about his experience treating hospitalized Covid patients and the importance of vaccines in eradicating disease. 
• Phyllis Arthur, vice president of infectious diseases and diagnostics policy for the Biotechnology Innovation Organization in Washington, D.C., detailed the race by companies like Pfizer and Moderna to roll out hundreds of millions more doses in the next few months.  

To view the entire presentation, go to:

Fifteen health and business organizations sponsored the event including:

The post Economist: Vaccinations fastest route to Arizona economic recovery appeared first on Â鶹´«Ă˝Ół»­.

At the end of each year, Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry President and CEO Glenn Hamer hands out his Ham(m)er Awards to recognize the people and groups who contributed in a big way to the year that was. This year’s edition looks back on a year that was unlike any other.

Hit by a once-in-a-century pandemic that created an instant economic worldwide collapse, and soon after racial unrest triggered by the tragic murder of George Floyd, it’s fair to say that 2020 has been a tough year. We’ve lost more than one out of every one thousand Americans to the virus, we’re still down more than 10 million jobs and there’s continued social unease. 

But these difficulties brought out the best in many of us and that’s the focus of this year’s Hammers.

The public health heroes

Let’s start with the obvious. No group is more deserving of recognition than the frontline healthcare workers who have worked nonstop despite near-constant personal danger to keep us well and to educate us on what we should do to keep well. Our hospitals, including Banner, Honor Health, Dignity (CommonSpirit Health), Mayo and others have been working overtime on top of overtime. 

I want to especially call out Dr. Cara Christ for leading Arizona’s response. If you want the definition of an impossible and thankless job, it’s leading a state health agency during a pandemic.

A Hammer Award also goes to Dr. Amish Shah, an E.R. doc who is also a state representative. His blog posts early in the pandemic provided crucial information to the general public.

State Rep. Lorenzo Sierra deserves a Hammer for his deeply personal account of his harrowing battle with Covid that he shared in USA Today and with media outlets across the country.

Our universities stepped up massively. Led by Dr. Michael Crow, Arizona State University developed an easy and effective  for Covid that was a welcome alternative for those who don’t like something stuck up their nose. Dr. Bobby Robbins, a distinguished medical doctor, developed several efforts to assist in the pandemic, including a huge  to store vaccines. NAU stepped up under the direction of Dr. Rita Cheng as well, lending needed  in the development of vaccines. 

Testing. Testing. Testing. Kudos and a Hammer to Dave Dexter and Sonora Quest for rapidly developing the leading  for Arizonans. Testing remains critical to controlling the spread and we’re fortunate to have a major testing lab based in Arizona. 

Speaking of testing, A.P. Powell deserves a Hammer for setting up testing sites in underserved communities. A.P. also used his Bridge Forum to promote much needed dialogue between neighborhood leaders and senior law enforcement leadership. 

Our friends at Vitalant deserve a Hammer for their continuous efforts to encourage blood and plasma donations. Vitalant’s work is always essential, but in 2020 it was absolutely critical to help the scientific community learn more about Covid antibodies and convalescent plasma. Plus, they’ve ensured that blood donations can continue safely.

Frontline workers. The men and women who work in our grocery stores, serve our coffee and keep America running deserve our deepest thanks…and more. Many months ago, Peggy Noonan wrote that those who are undocumented who are keeping the gears of the American economy turning should be put on a track to citizenship. I agree. 

Over the air

Arizona’s media outlets have been essential partners in getting information out to the public throughout the pandemic.

Day in and day out, KTAR’s Jim Cross has been a go-to source for useful news about the pandemic’s impact on the state and national economies. The consummate workhorse, Jim was deservedly part of the . In addition to joining the Hall of Fame, he deserves a Hammer. I’ll let him decide which is the more flattering honor. 

ABC 15’s Garrett Archer, the Data Guru, boils down the flood of data from the state Department of Health Services into easy-to-follow daily digests. He points out positive and negative trends, avoids alarmist reporting, but also gives this crisis we’re living through the seriousness it deserves. He’s also relied on his years of experience as a congressional aide, campaign hand, and Secretary of State’s Office staffer to help us understand all there is to know about ballot counting. 

It’s also worth noting that AzDHS has done yeoman’s work in providing the public a wealth of information. I’m looking forward to seeing a daily tracker in 2021 on the number of vaccinations given across the state.

Crisis response

The Paycheck Protection Program is the most successful small business program ever developed or administered in the history of the country. The relatively smooth administration happened because multiple parties in Arizona stepped up in a major way. 

A Hammer Award goes to Paul Hickman, the head of the Arizona Bankers Association, for leading the charge. His organization was in regular contact with Capitol Hill and his member institutions were essential in getting the funds flowing to small businesses that desperately needed the help.

A Hammer also goes to David Adame of Chicanos Por La Causa for helping to save thousands of jobs through Prestamos, a Community Development Financial Institution, which issues microloans to struggling small businesses in underserved communities.

More than 80,000 Arizona companies secured over $8.5 billion in largely forgivable loans. A new round is on its way. I want to thank the U.S. Â鶹´«Ă˝Ół»­ of Commerce for the fantastic materials it distributed on PPP and other relief for businesses that have now been downloaded a billion times. 

A Hammer goes to Sandra Watson and her entire team at the Arizona Commerce Authority for putting together comprehensive programming for small businesses on how to navigate the pandemic. I believe that Sandra is the best economic development professional in America. The proof? During a pandemic it was announced that  would come to Arizona. This news would be eclipsed in the evening of the same day when it was announced that  would invest more than $12 billion and bring nearly 2,000 jobs to Arizona, the biggest deal in our state’s history. 

Sandra was charged with leading the Arizona Together fund, the business community’s response to the pandemic. This fund chaired by Eileen Klein has distributed millions of dollars in aid. Many donors deserve credit. Special recognition goes to Catherine Ivy of the Ben and Catherine Ivy Foundation for her generous $5 million donation and to Michael Bidwill for being the first to contribute seven figures. 

Speaking of the economy, a Hammer goes to Jim Rounds and the crew at Rounds Consulting Group for their outstanding work to help industries of all types not only understand the impact the pandemic has had on the Arizona economy, but also what policymakers can do to help Arizona recover in a position of strength.

A Hammer goes to Sen. Kyrsten Sinema for hosting weekly conference calls with the business community during the early stages of the pandemic. These practical calls helped to ensure that Arizona businesses were well represented in Washington when it came to Covid relief. She delivered. 

Kim Sabow and the Arizona Lodging and Tourism Association deserve a Hammer Award for rolling out the best safety program on the market. The AZSAFE + CLEAN hotel certification program is the model that can be used for other industries. Kim’s industry was hit first and worst, so credit to her for leading her industry through the most difficult period ever.

Globalization is good. A Hammer goes to Pfizer (U.S.) and BioNTech (Germany) for developing the world’s first widely distributed vaccine. Clocking in at 95% effectiveness using mRNA technology, the vaccine provides hope that other illnesses (cancer) will ultimately benefit. The key is to get as many people as possible vaccinated and as quickly as possible. The U.S. is leading the world in doses administered, with Israel leading on a per capita basis. The Trump administration deserves tremendous credit for developing Operation Warp Speed. Many experts said a speedy, safe vaccine was not possible. They were wrong. To have multiple vaccines at around 95% efficacy hit the market in less than one year is the accomplishment of this century. 

Speaking of private sector contributors stepping up to meet a global need, Honeywelldeserves a Hammer Award for its lightning-fast turnaround of its Arizona production lines to crank out millions of N95 masks. The effort was so impressive that it earned a factory visit from President Trump. Honeywell’s work in 2020 wasn’t a nice-to-have, it was must-have, and it was an inspiring display of American ingenuity and invention. 

The Hammer Award for Model Bipartisanship goes to Gov. Doug Ducey and State Superintendent Kathy Hoffman for joining together to provide smart, healthy and at times politically courageous guidance to keep our K-12 system running. Our teachers and school staff members all deserve big thanks for ensuring our kids have a safe place to go during this most disruptive period.

There’s no I in team

I’m very fortunate to have served under excellent board chairs throughout my tenure at the Â鶹´«Ă˝Ół»­, and this year was no exception.

We started out 2020 with Susan Anable at the helm, who was completing her second year with the gavel, which itself was unusual because our chairs usually rotate every year. But Susan didn’t bat an eye when the board asked her to take on a second year. No one knew then that the business community would be entering its most challenging year ever, but Susan took on the challenge with her usual aplomb and helped shift the Â鶹´«Ă˝Ół»­ into crisis response. I should also recognize her company, Cox, which has proven to be an indispensable partner in helping thousands of Arizona kids learn remotely and folks like me work from home.

In June, we welcomed Dawn Grove as our board chair. Dawn’s a longtime Â鶹´«Ă˝Ół»­ member and is recognized nationally and globally as a leader in manufacturing policy with a razor-sharp legal mind. An executive with Karsten Manufacturing, the parent company of PING, few have Dawn’s insight into what makes Arizona’s manufacturing environment one of the country’s most competitive. The fact that Arizona now has more manufacturing jobs than construction jobs is in no small part thanks to Dawn’s contributions over the years. As we turn our attention to the great Arizona economic recovery of 2021, the Â鶹´«Ă˝Ół»­ board couldn’t ask for a better business leader. 

Finally, a Hammer Award to each team member at the Â鶹´«Ă˝Ół»­, Â鶹´«Ă˝Ół»­ Foundation and Arizona Manufacturers Council. Our last regular day in the office was in mid-March. They didn’t miss a beat. The team assembled regular virtual meetings with our colleagues across the business community; presented dozens of webinars for small businesses to access relief funds; shifted each of our regularly scheduled events online; coordinated dozens of video calls for our members with leaders in government, business and academia; launched a  with the Arizona Medical Association to help businesses keep their employees and customers safe and healthy; issued  on big issues; and even cranked out a regular YouTube show on news of the day (that sometimes as many as dozens enjoy!). To top it all off, they kept me and my schedule in one piece as I shifted to mostly working from home.

I would not want to repeat 2020, but I’m thankful for my colleagues at the Â鶹´«Ă˝Ół»­ who made lemonade out of a year full of lemons.

We’re in the final months of what has been a lethal pandemic. There is light at the end of the tunnel. Please be safe and get the vaccine as soon as it’s your turn. 2020 has been tough. There’s potential for 2021 to be the year we vanquish Covid-19 and begin a new and robust expansion. Let’s make it happen.

Glenn Hamer is president and CEO of the Arizona Â鶹´«Ă˝Ół»­ of Commerce and Industry. 

The post The 2020 Hammer Awards appeared first on Â鶹´«Ă˝Ół»­.

A new report that analyzes the economic impact of Proposition 208 in Arizona shows that the measure would hurt all income levels, resulting in lost tax revenues for critical services like child protective services, public safety, and higher education.  

If passed by Arizona voters on Nov. 3, the proposition, known as the “Invest in Ed” initiative, would put the state in the top 10 of the highest income tax states in the nation. 

That would, at a minimum, cause a $2.4 billion reduction in local and state tax revenues over the next decade due to lost business attraction and expansion, jobs and wages, the report states.  

“Small businesses across the country have closed their doors because of the COVID-19 pandemic, and now small business owners in Â鶹´«Ă˝Ół»­ay be dealt a further blow under Proposition 208,” said Victor Riches, president and CEO of the Goldwater Institute that conducted the analysis. “As this report shows, the backers of Proposition 208 want to turn Arizona into California or New York—where crushing tax burdens are driving job creators from the state and bankrupting their own futures.” 

The study, , was conducted by the Goldwater Institute’s director of education policy, Matt Beienburg, and Jim Rounds, a senior fellow.

Overall economic impact would offset benefits 

Under the initiative, Arizona’s top income tax rate would be raised from 4.5 to 8 percent – almost an 80 percent percent increase. 

Proponents of the measure want to tax high income earners to provide funding for K-12 education. 

But the analysis indicates that any benefits to education would be offset by the damage such a massive tax hike would have on the overall economy.   

“The promised increases in teacher pay and reductions in classroom size will be negligible. However, the economic harm from the measure will be significant,” said Rounds, adding that Arizona should be able to design “a better plan to help both the economy and K-12 education.”  

All industries and incomes will feel it 

To determine the potential impact of the ballot initiative, the economists analyzed the expected economic fallout, accounting for job losses, suppressed wage growth, dampened business recruitment, and harm to the state’s economic base. 

Should Proposition 208 become law, the report findings show that: 

• A minimum of $2.4 billion in state and local tax revenues will be lost As more businesses fail under the weight of the tax hike, job growth and wages would suffer. If the initiative succeeds, a conservative economic modeling of the financial impact indicates that a minimum of $2.4 billion in tax revenues would be lost over the next decade. 
• Cuts to social services, public safety, and higher education The mandate would cause a minimum of $120 million in lost revenues annually to the state’s general fund. Since the proposition requires any decrease in state revenue to be made up from other sources, that would likely put critical services on the chopping block.
• Arizona would see greater job losses than the 2001 downturn Under the most conservative scenario, job losses will reach a minimum of 124,000 over the course of 10 years. That’s four times greater than the losses experienced during the 2001 economic downturn.
• New business expansion would drop The risk to new business attraction and expansion could be as large as a 25 percent reduction.
• Proposition 208 won’t affect only high-income earners The measure will impact businesses that file under the individual, not the corporate tax code. Passage would jeopardize the employment of thousands of plumbers, dry cleaners, nurses, retail store employees, mechanics, janitors, and others throughout the state.

About half of the Arizonans affected will be small business owners Fifty percent of those whose tax rates will be directly targeted will be small business owners. These individuals represent thousands of job creators and they will bear a disproportionate load of the Invest in Ed price tag.

There are better ways to fund education

If voters pass the initiative, Arizona’s standing as a role model for economic growth could quickly erode, Round said.  

“Proposition 208 will impact the state’s ability to be a national leader in economic growth over the next decade. Arguments for additional education funding need to come from diligent research on individual budget items, not from broader generalizations about overall funding. Changes to public policy of this nature also need to be based on reliable return on investment calculations.” 

To read the full report, go to . 

The post New study: Prop. 208 would cost Arizona $2.4 billion in tax revenue appeared first on Â鶹´«Ă˝Ół»­.