Arizona has recovered nearly all of the jobs lost during the height of the COVID-19 pandemic. Some parts of the state, specifically the Phoenix area and Pinal County exurbs, recorded 297,000 more employees than they had last April.

For the second month in a row, Arizona leads the nation in small business job creation according to the Small Business Jobs Index from Paychex and IHS Markit. In February, Gov. Doug Ducey set a goal of adding 325,000 jobs to the economy within the year, which Arizona has already . Of the 331,500 jobs shed since April 2020, Arizona has recovered 94% of them.

The number of Arizonans relying on unemployment benefits has also dropped from nearly 200,000 to only 30,000 according to Jim Rounds, an Arizona economist.

The success that Arizona has achieved in its recovery from COVID-19 is even more impressive when put into a national context and compared with the recovery rates of other states. The Wall Street Journal showing the ICU occupancy rates for states earlier this year in January compared with the end of August.

Arizona is seen as one of the few states that have managed not to return to higher ICU occupation rates over the course of the year and following the introduction of the Delta Variant.

 Arizona’s economy outpaces the national average in several important ways.

Arizona is nationally for the highest Real GDP relative to Pre-Covid levels.

As Arizona looks to continue the growth of its almost completely recovered economy, the driving forces behind the state’s exceptional growth should be acknowledged. 

A recent produced in August by ThinkWhy, a Dallas-based company working to bring AI-driven labor market solutions, ranks Metro Phoenix as the No. 2 ranked labor market in the United States. The company uses a ranking index that identifies and tracks the 10 most important performance indicators used to measure economic performance. ThinkWhy’s study found that the biggest economic drivers for the Phoenix-Mesa-Scottsdale metro area are “net migration” and “college degree holders.”

Economic observers believe vibrant public-private partnerships, a foundationally pro-growth regulatory agenda and an embrace of expanded trade relations with inter-and intra-national neighbors could provide a formula for continued economic success. 

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Arizona, like the nation as a whole, is experiencing an uneven recovery from the initial economic impacts of the pandemic. What that means is that some sectors of the economy have rebounded sharply, while others remain in freefall.

At this critical moment, pro-growth policies can help businesses recover and help get the unemployed back to work, but bad policy risks further decimating businesses and jobs. Arizona’s Proposition 208 is perhaps the most misguided policy on the ballot—in any state—this November.  

Small businesses are a critical source of jobs and a vital part of our economic ecosystem, serving as both suppliers and customers to larger organizations. In Arizona, small businesses employ  of Arizonans in the private sector. In certain sectors, small businesses have an even larger footprint. For example, small firms employ 82 percent of all Arizonans in the construction industry and 62 percent in real estate. They also employ 56 percent of those in food services and accommodation and over 50 percent in professional and business services.  

Some of those , particularly those that rely on customers gathering in-person, have yet to rebound from the pandemic-induced recession. One in five jobs in the accommodation and food services sector that existed in February, for example, are gone today. Moreover, nearly 30,000 professional and business services jobs have disappeared. For Arizona to recover, these small businesses must recover. 

At the same time, we need the small business employers that are doing well to continue growing. Earlier this year, Arizona was  fifth in the U.S. for small business employment growth. It is easy to see why when you consider that sectors like construction increased their employment by nearly 40 percent over the last five years.  

But Arizona’s pro-business environment, and the ability of these small businesses to recover and continue to grow, would be fundamentally threatened if Proposition 208 is passed.   

Proposition 208 would increase tax rates on small business that pay taxes through the personal income tax by an astonishing 78 percent. Proponents  that this will generate nearly $1 billion a year in new taxes to fund schools. But that money has to come from somewhere, and it is most likely going to mean less business investment and fewer new jobs. One conservative  places the job loss at 124,000. And let’s not forget, fewer Arizonans working means fewer paying normal income and sales taxes,  the state and local governments an estimated nearly $2.5 billion over the next decade. 

Even these stark estimates may not tell the full story. Over the past decade, Arizona’s strong economy and quality of life has  more than 2 million Americans who moved so that they could call Arizona home. Many came from states that punished small business owners with high tax rates. If Proposition 208 passes, Arizona will move from being a low-tax state to having one of the top-ten-highest tax rates in the nation, alongside the likes of California and New York. Passing Proposition 208 would be the equivalent of rolling up the proverbial welcome mat and closing the door on small business owners.

Proponents of Proposition 208 claim that these tax increases are necessary to ensure a quality education for Arizona students. But that is not true either. Since 2015, Arizona has invested an additional  in K-12 education. Teachers’ salaries have increased by an .  

Since 2000, Arizona has made considerable progress in  the number of students who are at or above proficiency in math and reading. There is more work to be done, but it will take smart targeted investments that help improve our school system and our economy.  

Proposition 208 isn’t smart or targeted, it will hurt Arizona’s economy and cost the state jobs when we need new job creation the most. It deserves to be defeated.  

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

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Arizona, the nation and the world are starting to see some economic recovery on the tails of a global recession caused by the COVID-19 pandemic.  

Now, keeping that momentum going will rely on two major factors, including the willingness for governments to lend a helping hand to those who need it most, top economic experts said Wednesday during the s annual Economic Outlook 2021 sponsored by Cox Communications. 

The other major factor is how well countries can keep the virus in check, said presenters Elliott Pollack, CEO of Elliott D. Pollack and Company; Matt Stephani, president of Cavanal Hill Investment Management, and Scott Horsley, chief economics correspondent for NPR.

All three spoke about the impact of the virus and what lies ahead for the Phoenix region, the nation and the world. 

Here are some of the key takeaways:

New round of relief is essential for the “have nots”  

The U.S. has had more coronavirus cases per capita than most other countries, but it has been able to weather much of the financial toll because of the federal CARES Act passed in March. 

Through the Act, Congress has provided $3.1 trillion in relief for businesses and individuals, which has carried both the “haves and the have nots” throught the financial turmoil, economist Pollack said. 

But recent gridlock on a new round of relief could upend life for the “have nots,” placing them in a position where they are unable to pay monthly bills, he said. 

“Congress, the House and the Senate, have let politics get in the way of the need of the public and they have essentially muted the benefit from the $3.1 trillion.” 

He and Stephani both worry that Congress likely won’t act until after the election. 

Virus makes forecasting difficult 

The other major factor in recovery is the virus itself, the experts said. 

“In just a matter of months, the coronavirus has spread to every corner of the globe and almost everywhere economic contraction has followed in its wake,” Horsely said. “This is the first time in 150 years so much of the planet has suffered a recession at virtually the same time.”

Countries like China, which has taken “draconian” steps to shut down society to keep the virus at bay, are seeing stronger recovery. China’s movie box office sales, for example, are now almost to where they were pre-pandemic, Horsely said.

But others like Mexico and India that are seeing surges in cases do not have the resources or the willingness to provide stimulus relief. Their future is less certain. 

Personal savings to jump start recovery 

Stephani, who spoke from a national perspective, was optimistic about a fairly quick recovery for the U.S. over the next year and a half.

Americans have piled up record levels of personal savings and money market assets under stay-at-home orders, he said. The nation’s personal savings rate is averaging about 24 percent. Coming into the pandemic, the rate was only around 6 to 7 percent. 

In dollar terms, bank deposits are up $2 trillion from pre-COVID levels, Stephani said. Money market assets have risen from $3 trillion to $4.5 trillion.

If a vaccine or effective treatment arrives within the next year, consumer activity should explode with all that available cash. 

“That is dry powder that is going to come into the economy and when it does, it will move the economic needle,” Stephani said. 

Phoenix metro fastest growing major market 

Meanwhile, the outlook for the Phoenix region is very promising, Pollack said.

For the most part, the recovery of jobs in metro Phoenix has been “miraculous,” he said. Phoenix has recovered more than half the jobs lost when due to the pandemic. 

“While the United States was losing 98 percent of all jobs created between the last recession and February, greater Phoenix only lost 41 percent,” he said.

Many factors are responsible for the region’s healthier outlook, including federal relief from the CARES Act, a thriving economy prior to COVID-19, and Arizona citizens who have been masking up and social distancing to reduce the spread of the virus.  

Millennials and people over 65 will be buying homes 

Moving forward, most industries in the Phoenix region should see full recovery over the next two years. 

Housing will continue to be one of the strongest sectors, in part due to the virus, Pollack said. 

COVID-19 is causing people to want to leave high rents in small apartments in big cities to buy homes in more affordable locations like Arizona. 

Demographics will also benefit the Valley and the state as the two largest population groups, millennials and people over 65, seek to purchase houses over the next decade. 

Prospects for tourism, hospitality, restaurants 

Industries that have been hardest hit, meanwhile, will come back in force once  Americans can fully participate in the economy again, the experts said. 

Prop. 208 tax hike biggest threat to growth

One potential drawback for recovery would be passage of Proposition 208 in Arizona in the upcoming election, Pollack said.

Known as the “Invest in Ed” initiative, it would put the state in the top-10 of the highest income tax states in the nation. Under the initiative, Arizona’s top income tax rate would be raised from 4.5 to 8 percent – almost an 80 percent increase. 

In addition to deterring economic development here, thousands of small businesses that file their taxes under the individual tax code would be impacted. Many might not survive.  

“I’m not saying education doesn’t need more money; I’m saying, this isn’t the way to do it. Besides the inequity, you’re going to hurt economic development,” Pollack said. “We would go from the 15th lowest marginal personal income tax rate in the country to the ninth highest.

“It’s something that would come back to bite us.”

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Arizona is positioned for a faster economic recovery than the rest of the nation, and with some strategic moves on the part of state policymakers and citizens, it should jump back to a leading spot within next year or so, according to local economists.  

“We have the chance for this to be one of the best decades ever, but it’s going to take more work to be in the top five again in terms of economic activity,” said Jim Rounds, president of Rounds Consulting Group, Inc. that advises both public and private sector entities on matters of policy and economics. 

Rounds recently spoke to Â鶹´«Ă˝Ół»­ about why the state economy is outshining the nation and what is needed to keep that momentum going.  

University of Arizona economist George Hammond, featured in a recent Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry , says the most important step moving forward is for Arizonans to stay masked, socially distanced and sanitized. Hammond directs the university’s Economic and Business Research Center at the Eller College of Management. 

“If we can avoid a significant surge in the outbreak as we go through the fall and winter months, I think we’ll continue on a gradual recovery trajectory like a Nike Swoosh type recovery, getting us back to where we were before the pandemic by mid 2021 or in the second half,” he said. 

Tough lessons from Great Recession

Prior to the pandemic, Arizona ranked in the top five in the nation for personal income growth, job growth, population growth and overall economic activity. Much of that growth was due to policy decisions made after Arizona’s economy tanked during the Great  Recession of 2008, both economists said. 

In clawing its way back, the state put several economic pillars in place. One was Governor Doug Ducey’s $1 billion rainy day fund that has proven its worth during the pandemic.  

The state’s competitive tax rates, business-friendly regulatory environment and investment in workforce training and education also have helped put Arizona in a better position than other states, Rounds said.  

Arizona jobs’ picture better than nation

Currently, Arizona is No. 3 in the country in terms of jobs growth. 

Arizona’s healthier data is in part due to it being one of the fastest growing states before COVID-19 hit. Industries like construction and remote retail have stayed strong. Gov. Ducey’s early and gradual reopening of the economy also contributed to jobs and economic growth, Hammond said. 

Personal income bolstered by federal lifelines 

Personal income also got a boost from the bipartisan CARES Act passed by the U.S. Congress in late March to help keep Americans and businesses afloat during the coronavirus shutdowns. 

These lifeline programs have helped families pay their bills and put food on the table, Hammond said. 

In the first few months of the pandemic, CARES Act programs pumped more than $17 billion into the state’s economy including:

• Increased unemployment benefits: Unemployment compensation recipients in Arizona received an extra $600 tacked on to their weekly benefit of $240 for up to two months. That injected about $8.2 billion into the state, amounting to about 2.4 percent of the state’s total personal income last year.  
• The federal Paycheck Protection Program: The program, which provides grants to small businesses to keep employees on the payroll and pay company operating expenses, injected $7 billion into the economy early in the pandemic, representing about 2.1 percent of personal income in 2019. 
• Recovery rebates:  Rebates provided another $2 billion to citizens in the state.
• “So somewhere north of 5 percent of Arizona’s personal income last year was injected into Arizona’s personal income in just a couple of months,” Hammond said. “I think that’s had a significant impact in our ability to deal with the pandemic so far.”

Strategy for moving forward 

A state economic jobs package would be a good step forward to help reskill society, Rounds said. 

“We need to focus on high wage job creation and high tech and make sure universities are supported because they are going to be a supplier of this high wage workforce,” he said. 

Another measure that could stimulate recovery would be state assistance for the tourism industry, the hardest hit large sector, Rounds said.  

Currently, the tourism industry is down about 45,000 jobs. Additional state funding of $10 million a year could do a lot to stop other states from “stealing that pent up demand for tourism activity from under us,” Rounds said.

Meanwhile, state policymakers will have to work “very hard” to pull Arizona out of this downturn, Rounds said.  

“The concern now is, can we continue the momentum into the recovery? I think we can. People forget, we always outperform the U.S.

“When times are good we do better than the U.S. When times are bad, we’re even better.”

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While sectors of Arizona’s economy have suffered financial losses during the pandemic, the state is faring better than much of the nation, according to a leading economist. 

If Arizonans can stay masked, socially distanced and sanitized, it has a good chance for full recovery as soon as mid 2021, said the state’s heavyweight economic forecaster, George Hammond, a research professor and the director of the Economic and Business Research Center at the Eller College of Management at the University of Arizona.

“There’s a huge amount of uncertainty about how this is going to all play out and it’s connected to the outbreak and how the virus itself works,” said Hammond, who has been local and state economies for more than two decades from his university office in Tucson.Ěý

Hammond issued his latest projections and talked about how the state has managed to weather the pandemic at a recent , entitled Economic Forecast: Covid 19 Impacts on Arizona’s economy, hosted by the Arizona Â鶹´«Ă˝Ół»­ of Commerce and Industry.Ěý 

Arizona jobs’ picture better than nation

Among the reasons Arizona is hanging on are jobs and unemployment reports. 

In the early months of the pandemic, the nation saw 14.5 percent of jobs lost and has since recovered to 10 percent. Arizona’s is only 5 percent lower than where it was before the pandemic.

Arizona also has a slightly lower unemployment rate. In June, the rate was 10 percent compared with the nation’s 11.1 percent.

Arizona’s healthier data is due in part to being one of the fastest growing in the country pre pandemic, and industries like construction and remote retail remain strong. Governor Doug Ducey’s early and gradual reopening of the economy also contributed to jobs and economic growth. 

Personal income bolstered by federal lifelines 

Personal income also got a boost from the bipartisan passed by the U.S. Congress in late March to help keep Americans and businesses afloat during the coronavirus shutdowns.Ěý

These lifeline programs have helped families pay their bills and put food on the table, Hammond said. 

In the first few months of the pandemic, CARE Act programs pumped more than $17 billion into the state’s economy including:

• Increased unemployment benefits: Unemployment compensation recipients in Arizona received an extra $600 tacked on to their weekly benefit of $240 for up to two months. That injected about $8.2 billion into the state, amounting to about 2.4 percent of the state’s total personal income last year.Ěý 
• The federal Paycheck Protection Program: The program, which provides grants to small businesses to keep employees on the payroll and pay company operating expenses, injected $7 billion into the economy early in the pandemic, representing about 2.1 percent of personal income in 2019.Ěý
• Recovery rebates:Ěý Rebates provided another $2 billion to citizens in the state.

“So somewhere north of 5 percent of Arizona’s personal income last year was injected into Arizona’s personal income in just a couple of months,” Hammond said. “I think that’s had a significant impact in our ability to deal with the pandemic so far.”

Economic forecast for coming months 

Hammond also laid out projections for an “alphabet soup” of pandemic recovery scenarios including:

• A 20 percent chance the state will see a rapid V-shaped recovery, where the economy will quickly bounce back from the downturn, then return to pre pandemic levels by early 2021.  
• A 30 percent chance for a W-shaped recovery — the worst case scenario — that would occur if there is a surge of the coronavirus combined with a virulent flu season, forcing the state back into a shutdown and economic distress. 
• A 50 percent likelihood for a “Nike Swoosh-shaped,” or baseline, recovery where a bottoming out is followed by a steady and gradual rebound.

“If we can avoid a significant surge in the outbreak as we go through the fall and winter months, I think we’ll continue on a gradual recovery trajectory like a Nike Swoosh type recovery, getting us back to where we were before the pandemic by mid 2021 or in the second half,” Hammond said.

That will depend, of course, on the state’s ability to keep the virus in check.

“We are learning where the big risks are and what we can do to reduce those risks and what we can do ourselves to get control of the outbreak. The sooner we have control of the outbreak, the faster things will go back to normal.”

To watch the webinar in its entirety, go to: Economic Forecast:

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Millions of independent restaurant owners and employees displaced or struggling because of the pandemic could soon see relief through federal legislation that specifically targets them for help. 

A bipartisan bill introduced in both houses of Congress last month called the RESTAURANTS Act 2020 would provide $120 billion in grants to assist restaurateurs to rehire workers and for other operating expenses. 

Arizona Sen. Kyrsten Sinema, a Democrat, is the lead Senate sponsor along with Mississippi Sen. Roger Wicker, a Republican.

Their goal is to preserve independent and small franchise operators like the corner cafe, the tamale store, the neighborhood bar. 

“The introduction of this bill provides hope of survival for small business restaurant owners from the smallest towns to the broadest urban streets. It will help these struggling businesses who are still facing a difficult and uncertain future,” Sean Kennedy, executive vice president of public affairs for the National Restaurant Association said when the bill was introduced. 

Millions of restaurant workers remain jobless 

The pandemic has been particularly hard on independent food and drinking establishments. Even with inside dining now allowed in many states, customers continue to be wary and social distancing guidelines limit the ability to turn a profit, Kennedy said. 

And while U.S. Bureau of Labor Statistics show that hiring kicked up significantly in June, with food and drinking establishments adding 1.5 million jobs, more than 3 million restaurant workers still remain jobless. 

Â鶹´«Ă˝Ół»­om and pops facing “devastation”

In Arizona, independent operators are among those struggling to survive — if they haven’t already closed shop, said Steve Chucri, president and CEO of the Arizona Restaurant Association (ARA), which represents the industry that had $14.7 billion in sales in 2018. 

“In Arizona, the economic fallout has been devastating,” said Chucri, adding that Arizona restaurants lost roughly $29 million a day during the peak of the virus, and a total $815 million in April.

Before the pandemic, the industry employed 310,600 people, representing 11 percent of Arizona’s workforce, he said. 

A survey released last month by the ARA showed that, among restaurants still in operation, 89 percent have laid off or furloughed employees during the pandemic. 

On average, establishments are reporting a 63 percent decline in sales during the period from May 1 to May 15, according to the survey. 

Without a relief package, 72 percent of restaurant operators said it is “unlikely” that their restaurant will be profitable within the next six months.

Strong bipartisan, bicameral support   

There is strong bipartisan, bicameral support for the measure.

Representatives Earl Blumenauer, D-Ore. and Rep. Brian Fitzpatrick, R-Pa., introduced the House counterpart to the Senate version introduced by Sinema and Wicker. 

“Arizona restaurants fuel jobs across our state, and they need support now. Establishing a Restaurant Revitalization Fund will help get Arizonans back to work and ensure our local Arizona restaurants can keep their doors open as we continue to fight the ongoing coronavirus pandemic,” Sinema said. 

What the restaurant bill does  

The RESTAURANTS Act, which stands for the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020, would establish a $120 billion revitalization fund through the U.S. Department of Treasury. 

Among the measures :  

• Funding would be available to food service or drinking establishments that are not publicly traded or part of a chain with 20 or more locations doing business under the same name
• Eligible expenses include: payroll, benefits, mortgage, rent, utilities, maintenance, supplies including protective equipment and cleaning materials, food, debt obligations to suppliers, and other costs
• The first 14 days of the grant’s opening would only be available to restaurants with annual revenues of $1.5 million or fewer, ensuring that the smallest restaurants are prioritized
• The grant values would cover the difference between revenues from 2019 and projected revenues through 2020 
• The legislation includes administrative funding toward outreach and engagement to restaurants owned and operated by women, veterans, and people of color. 

A study on this proposal found that the fund would generate at least $183 billion in primary benefits and $65 billion in secondary benefits — more than double the amount of the fund.

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Friends,

Once again, I am providing here an update on our situation with regard to the Coronavirus pandemic. In Arizona, we have over 350 deaths and over 8,500 cases, and while we mourn every lost life, we have been spared the worst. We have some good news to share: Our curve has plateaued, as daily cases and deaths remain steady as of this writing. Our hospitals have not become saturated to the point where mortality would have risen rapidly. Speaking from my own first hand experience in the ER and that of my physician colleagues, we have not had anywhere close to the experience that the New York area suffered. An important exception is the Navajo Nation, which continues to be a hotspot. The Department of Emergency Management (DEMA) has been working hard to ensure that supplies keep flowing and patients there are cared for well. Many people have also raised concerns about senior living facilities and prisons, but our data so far seems incomplete. These populations deserve further study and attention.

In America as a whole, the situation is more grim, led by the massive numbers from the New York metro area. We continue to see about 30,000 new cases per day and around 2,300 deaths per day. To put that in perspective, our leading cause of death in normal times, cardiovascular disease, usually kills around 2,300 people per day. Yes, COVID19 has now become the leading cause of death in America, and has been continuing to kill us at this rate for weeks. We have over 1.1 million confirmed cases in the US and over 65,000 total deaths. Compared to my last post (), the numbers have increased greatly. America has more official cases and deaths than any other country by large margins.

Some have asked why Arizona was so much different. Having been a prior resident of New York City, I believe that one big factor to consider is population density. In Arizona, we are much more spread out and we rely much less on elevators, small apartments in older buildings, and public transportation. We do not have as much international traffic. We also had a few more weeks to prepare and acclimate to the idea of social distancing, whereas New York was quickly caught off guard.

Despite all the hardship that we have suffered, our attitude here in Arizona has been remarkable – for the most part, we have been positive, responsible and caring toward our neighbors. Arizonans deserve to be commended and hear that their sacrifices saved many lives, and the difficulty that we have endured was not in vain.

Has our response been successful?

For the last six weeks, we have been under stay-at-home orders. Naturally, many people are wondering how much of a difference we are making with our lockdown policies. We can get a rough estimate of lives saved in Arizona by studying a unique case. Instead of strict social distancing, Sweden chose to enact a relatively lax set of guidelines. In contrast, all of its neighbors – Denmark, Norway and Finland – chose to follow a path close to Arizona’s policies. Note that the population density of Arizona almost exactly matches that of Sweden.

1) Compared to Denmark, Sweden has three times the death rate, and 5.5x the total number of deaths.

2) Compared to Norway, Sweden has six times the death rate and 11.5x the total deaths.

3) Compared to Finland, Sweden has six and a half times the death rate and almost 12x the total deaths. Our President agrees with this:

While Denmark has a higher population density, the other two are much closer to Sweden.

So now that we have a close comparison, we can calculate how many deaths were likely preventable in Sweden. Had they been like their neighbors, roughly 2,000 Swedish lives would have been saved so far. Over the next few weeks and months, that number is certain to increase. With 90% of their deaths in the senior population, the Swedes have chosen in essence fewer protections for their elderly and vulnerable with clear consequences. Given Arizona has 70% of Sweden’s population and a similar timeline, we have likely saved about 1,400 Arizona lives with our efforts so far, with many more saved lives to come. This might be a low estimate given we have a large senior population. Moreover, with an estimated 3-4 people hospitalized to every one death, Arizona’s health care system would have been easily overwhelmed without our lockdown measures.

The data so far also suggest that the Swedes have not received a countrywide economic benefit from their policies. According to its own central bank, the crisis has damaged their economy at a scale similar to neighboring countries, though these are just early estimates. Losing lives AND a shrinking economy would certainly be a lose-lose situation. More importantly, part of the reason for our lockdown was to avoid overwhelming the health care system and allow capacity and supply to catch up. In this sense, we have certainly been successful too. Millions of pieces of personal protective equipment are getting to where they are needed, hospital bed and ICU bed and ventilator capacity have increased tremendously, and testing has increased greatly. We are much better prepared than we were six weeks ago.

Recent State and Federal action

In response to our specific circumstances, Governor Ducey has issued an extension of the stay at home order until May 15. In his explanation, he reiterated that we have plateaued but “there is no trend” downward. He has been consistent in his message that a downward trend would be one of the factors he requires before choosing to reopen. He again stated that he has relied on evidence and solid science to make his decisions, and in doing so I believe he has acted admirably. His decision took courage, and he deserves our commendation, continued support and to be credited for the lives saved in Arizona. He specifically asked us for our patience and we should keep in mind that his request is on behalf of the greater good.

The Governor has allowed for elective surgeries to resume May 1, and a phased reopening of retail establishments with limitations next week. Arizona is also conducting a testing blitz each weekend throughout the month of May with a goal of screening 10,000-20,000 people regardless of symptoms. With a widespread and comprehensive program, we will add to our knowledge about the true rate of infection and hopefully contain the virus more effectively. Testing sites may charge, and they will accept insurance. Pre-registration is required at most sites. Testing locations and more information are available here:

In other good news, antibody tests have been introduced last week from several manufacturers including the University of Arizona. Antibody tests provide a different type of information and will add to our armamentarium in fighting the virus. In contrast to the standard RT-PCR nasal / oral swab tests to diagnose an active infection, the antibody tests determine whether a person has an immune response to the virus and therefore has likely recovered. In theory, the tests have the potential to identify people who would be able to move around society freely with little worry of infecting others. Unfortunately, because of the rapid development and early stage of research on the tests themselves, we still have significant concerns about their accuracy and what a positive result might actually mean. The value of the tests should improve over the next few weeks as more data becomes available.

Meanwhile, the Federal government passed its third COVID19 relief package last week. It provides $484 billion to replenish the depleted small business assistance loan program, as well as smaller amounts for testing and hospital support. The Arizona legislature may also meet later this year to take up more COVID19-related legislation.

Looking ahead to reopening

Naturally, many of you are now wondering how much longer our stay-at-home orders will continue in the long term and how long businesses will be shuttered. A spirited political conversation in Arizona and around the country continues with regard to reopening. The economic effects have been devastating to several sectors, but most notably retail, travel, tourism, gyms, personal services such as salons, beauticians, barbershops, and hospitality including bars and restaurants, among others. The spillover then moves into all remaining sectors as overall demand slows.

Over the last month, we have received dozens of constituent calls and emails about help for small business and unemployment. Some are desperate because they don’t know how they will feed their families, and are afraid that their lifetime’s work will be wiped away. We have been busy connecting all of them to available resources. The rollout of the Small Business Administration’s Paycheck Protection Program has been problematic, but funds have started to flow through just as Congress provided another round of financing. Similarly, long wait times and lack of personnel have hampered the unemployment assistance program, though the problems have improved with increased hiring at the Arizona Department of Economic Security.

Clearly, Arizona and the country will need to reopen, as we cannot remain in an economic and social freeze for months. But we do not want to see our sacrifices wasted and eventually experience a greater loss of life. The virus is still out there, and if we suddenly remove all of our restrictions, it will quickly run amok and cause mayhem.

Furthermore, loss of public trust in being able to participate in the marketplace safely could cause even worse long-term economic damage. Governor Ducey in his explanation on the 29th argued that economic recovery depends upon the public’s confidence to interact and conduct business without fear of death for themselves or their family members. In the survey he cited, 30% of people are ready to go out immediately, 40% would require assurances of public safety, and 30% are too concerned to go out until a vaccine becomes available or the pandemic ends.

To reiterate, without credible public assurances, 70% of people would not fully re-enter the marketplace. We would effectively suffer something akin to a large boycott, which would be unsustainable, especially for businesses that normally operate with slim margins such as restaurants. Therefore, I believe that our economic and public health interests converge rather than conflict in the long term.

Please note that the assurances that the public requires would have to come from our health professionals, and as a whole, our medical societies and health organizations are not willing to support reopening without a sound, data-driven plan. Even if political leaders unilaterally were to “open the economy” by decree, we might still face inadequately low demand. If cases and deaths subsequently spike or the health care system becomes overwhelmed, public trust would be further eroded, making matters even worse for the recovery.

So if we can’t simply reopen, and we can’t just stay closed, what can we do?

A Measured Path Forward

I believe the real question before us is not whether or when exactly we should reopen. Let’s focus instead on WHAT WE NEED in order to open safely and execute that plan as quickly as possible. Logically, the following elements appear crucial for public health:

1) The 4 T’s: Test, Track, Trace and Totally isolate. The ability to conduct widespread and rapid testing as part of a comprehensive strategy to track and trace all results followed by complete isolation for the positive cases would effectively and surgically remove the virus from circulation. This is how several Asian countries reopened and minimized further outbreaks. New York State under the decisive management of Governor Andrew Cuomo is currently hiring thousands of workers to perform these functions. Arizona’s DHS has an initial plan to hire 400 contact tracers. Our efforts will take training and ramp-up time, but ultimately allows us to assure the public will be as safe as possible. COVID19 will still be with us, but any further exponential spread would be quickly nipped in the bud. A word of caution: Individual states will struggle on their own with these endeavors – we will need much more Federal government support for logistics, CDC guidance, coordination than has been provided so far.

2) Downward trend in cases and deaths. This would allow our contact tracers to chase down the virus. If the virus is spreading exponentially, our contact tracing teams would never catch up with caseload without ever-increasing resources. With a flat curve as we have now, we would simply need more tracers to find every case and catch up to the virus. We seem to be on the verge of a downward trend, but only time will tell.

3) Adequate hospital bed, ICU bed, staffing, PPE supply and vital equipment capacity. In Arizona, we currently have adequate available hospital and ICU bed capacity as well as staffing. PPE supply is tenuous but remains overall adequate with the reuse programs and increased manufacturing. We have 1500 ventilators to adequately meet current use, up from the 300 we started with. We have added over 1500 hospital beds, but as we reopen, we will need to keep constant vigilance over these numbers. Fortunately, DHS currently keeps track of real-time data on a daily basis.

4) A system for controlling entry of the virus from travel. Across the country, foreign and even possibly domestic travelers will need to be screened, monitored and quarantined when necessary. Asian countries also employed these tactics to keep their populations safe. Again, the Federal government may need to train TSA to execute these efforts at airports and other checkpoints. Governor Ducey has issued a self-quarantine order for New York area travelers so far.

5) Clear new marketplace rules. In the upcoming weeks, we will need to establish rules to allow businesses to reopen in ways that generate only a very minimal risk of viral spread. This will require creativity, trust and partnership among our government, business and public health communities. Barbershops and golf courses are quite different in terms of risk, and I hope that following evidence will allow us to identify opportunities for progress.

My hope is that the above measures are established rapidly but carefully with a watchful eye to respond nimbly to the many upcoming fits, starts and bumps in the road. Repurposing unemployed workers for contact tracing and unused capacity such as hotel rooms for quarantines to accomplish the above goals could also represent creative economic solutions.

Final thoughts

When I first began to post these updates 6 weeks ago, I wanted everyone to understand upfront that we would face serious hardship, and we have indeed. Beyond the economic effects, people are suffering from loneliness, frustration, and anxiety related to the isolation and sudden change in our way of life. We miss each other and being able to be close to our friends and family and strangers too. We miss activities and sports that make life enjoyable. We do not want this to become our new normal, and it is trying our patience to a tremendous degree.

In the face of such tiresome adversity, I ask you again as my friends, fellow Americans and constituents, please let’s continue to summon our inner fortitude. We are a strong people and I continue to believe that this situation will show us our capability and resilience. We are not quitters. We have shared goals of a vibrant economy and confidence in our public health and safety, and we will not abandon them. We are not complainers either, but rather innovators who have thrived throughout history because we see opportunities where others see obstacles. The pandemic has forced upon us a new normal, but I know Americans will adapt and succeed. There is a solution and an end to this, and it is within our reach. Let’s choose a path that will deliver us with our national fabric intact so that our posterity will remember our ingenuity, bravery and resolve with pride and reverence.

(And please, order a meal from your favorite restaurant today if you are able. I just did. They need your support!)

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Arizona businesses that are losing revenue due to the coronavirus can tap into a wealth of resources to help them stay afloat during the pandemic. 

From grants, to no-interest loans, to technical assistance, there are many avenues for relief. One of the largest is the federal Paycheck Protection Program that opened its second round of funding for small businesses last week. It provides $310 billion for companies including those who lost out during the first round when the funding ran out in the first two weeks. 

Glenn Hamer, president and CEO of the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry, is hoping the process will be easier and more accessible this time. 

“More than one million jobs in Arizona are connected to small businesses and more than 350,000 Arizonans have filed unemployment claims in the past month,” Hamer said. “The administration of these federal programs must be simple for small business owners to navigate. If there isn’t radical improvement, then it could be too late for them.”

The Arizona Â鶹´«Ă˝Ół»­ and chambers statewide have as their top priority the survival of small businesses. Most chambers have links to resources, tips and “cheat sheets” in both English and Spanish on their websites to assist businesses. 

Dozens of programs for small and mid-size companies 

There is a wealth of resources designed to help businesses and employees survive financially during the pandemic including: 

FEDERAL FORGIVABLE LOANS 

Paycheck Protection Program (PPP)

Companies with 500 or fewer employees,  including independent sole operators, may apply for the U.S. Small Business Administration (SBA) . Companies can receive up to two months of operating costs including payroll, rent and utilities. The majority of the funding is forgivable, acting more like a grant than a loan. Those applying should go through their regular bank or find a qualified lender on the Arizona Banking Association website at: SBA .Ěý

Free training to navigate PPP application process

The Arizona Â鶹´«Ă˝Ół»­ of Commerce and the Arizona Small Business Association launched the CARES Act Readiness Program for Small Businesses, a free training program that helps both novice and experienced borrowers navigate the federal assistance program. The programs are in English at: or Spanish at .Ěý

FEDERAL LENDING FOR SMALL, MID SIZE COMPANIES 

The Federal Reserve announced that it is establishing a Main Street Lending Program to support lending to small and medium-sized businesses that were in good financial standing before the onset of the COVID-19 pandemic. For more information go to: . 

TAX CREDIT EXEMPTION FOR EMPLOYERS

The federal Employee Retention Tax Credit is a new tax credit program designed to help companies and nonprofits retain their employees during the coronavirus outbreak. Employers whose business operations are suspended, partially suspended or are experiencing significant revenue losses because of the virus outbreak are eligible for the tax credit exemption. To learn more, go to:

The U.S. The Â鶹´«Ă˝Ół»­ of Commerce also has issued a guide to assist employers at: . 

INDEPENDENT CONTRACTORS, FREELANCERS  

Unemployment benefits for independent contractors

Due to COVID-19, independent contractors can qualify for unemployment payments in Arizona. In the past, this service was not available to freelancers and 1099 contractors. Applicants may receive up to $600 weekly during the pandemic. Expect a wait time as the Arizona Department of Economic Security is dealing with a record number of claims. For more information, go to:

NO INTEREST, LOW INTEREST LOANS 

Kiva Tucson

Kiva Tucson, Growth Partners Arizona and Community Investment Corporation have partnered to provide no-interest, no-fee, community-backed business loans from $1,000 to $15,000 that are crowdfunded on Kiva’s world-wide online platform. Learn more at::Ěý

Small Business Success Loan

Growth Partners Arizona, in collaboration with the Business Development Finance Corporation, are offering loans of $10,000-$75,000 to qualified small businesses for equipment, long-term working capital, tenant improvements, consolidation of more expensive debt, and more. For more information, go to: .Ěý

HOTLINE HELP FOR PHOENIX BUSINESSES 

City of Phoenix Hotline

Phoenix businesses hurt by the pandemic can call the hotline at (602) 262-5040 to be connected to resources, financial assistance, and more. The city does not have a call center so the hotline is the main phone number for Community and Economic Development. If possible, all calls are answered or returned within one business day.Ěý

The department also has a list of many resources available for city businesses at:

RESTAURANT WORKERS  

The restaurant industry has been among the hardest hit in the pandemic. To help employees, a number of groups are offering grants and accepting donations to help including:

Arizona Restaurant Association Relief Fund provides immediate funding for restaurant workers impacted by the pandemic. Individual grants of $500 are being given to restaurant industry staff who have suddenly found themselves without a paycheck. Donations also are being accepted to help these employees. Go to:

Another Round Another Rally is providing $500 relief grants in emergency assistance for employees in hospitality. Chefs, servers, bartenders, dishwashers, sommeliers, managers and others in hospitality roles who have lost jobs or had hours slashed. The group has been flooded with requests so donations are welcome. More information is available at: 

Â鶹´«Ă˝Ół»­ road maps and “cheat sheets”

Â鶹´«Ă˝Ół»­s of commerce statewide also have lists of local, state and federal resources to help businesses on their websites. 

The Arizona Â鶹´«Ă˝Ół»­ of Commerce and Industry offers a comprehensive resource guide at: . The U.S. Â鶹´«Ă˝Ół»­ of Commerce also has a host of links to resources and tips for small businesses and sole-operator companies at: .

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In Arizona, certain sectors of the economy are plunging as the pandemic delivers its heavy toll. Many restaurant workers are laid off, almost all hotel rooms are empty, small shops are closing by the day. 

Federal stimulus funding also is not reaching some small businesses that need it most. 

How severely these factors will impact Arizona’s economy in the long run is not entirely clear.  National economists’ forecasts for the U.S. overall range from a quick recovery after a brief recession to a long heavy contraction. 

In Arizona, however, economist Jim Rounds believes this decade could end up being the state’s best yet.

That does not mean there will not be a downturn for a year or two, said Rounds, president of Rounds Consulting and a longtime Arizona economist who often advises state and municipal leaders on economic policy and strategy. 

“In terms of where we’re going, we’re going to see the pain everywhere,” said Rounds who sat for an interview with Arizona Â鶹´«Ă˝Ół»­ of Commerce and Industry President and CEO Glenn Hamer recently to share his perspective on what’s ahead.  

Some businesses will not survive, he said. But the state is well positioned to weather the storm and come back stronger in the next two years.  

Arizona well positioned to weather the storm

Arizona came into the pandemic with one of the strongest economies in the nation. A healthy rainy day fund of $1 billion has proven to be sound planning, he said. Another billion would even be better.

“The beauty of this is the basic economic foundations that we’ve been setting up with the governor for the last several years. We have a good workforce. We have good infrastructure. We have a good regulatory environment — all these things that are really strong,” Rounds said. “Once those are set, it allows us to create the high wage jobs that then create all the other low wage jobs as well.”

By continuing to focus on maintaining these pillars, Arizona will see a healthy recovery and has the potential to bounce back in a huge way, Rounds said.

The key: fine tuning on front end, long term planning for back end  

It will require not only taking steps to help businesses during the current fiscal crisis, but long term planning as well. Plotting ahead with strategies like working to further fuel the growing technology and bioscience sectors and luring more suppliers to the state, he said. 

Arizona State University, the Arizona Â鶹´«Ă˝Ół»­ of Commerce & Industry, Greater Phoenix Economic Council, Arizona Commerce Authority, Arizona Office of Tourism, Valley Partnership and other organizations are already strategizing for long term survival. 

“There’s no playbook for what we’re talking about. This is so unusual, but we need a set of instructions,” Rounds said. 

“The number one key on all these complicated economic issues is to have the right info. How to maximize business retention opportunities. How we’re going to come out of this downturn.” 

Casualties, potential breakdowns on road to recovery 

Inevitably, there will be economic consequences. Small independent operators are at risk of extinction.  

“I think what we’re going to end up seeing–and I’m pretty confident in this, unfortunately–is a lot of the places that we like to go grocery shopping at, the small stores, the restaurants, they are going to be gone and they are going to be replaced with the Applebees and the Chilis. 

“Eventually some stores will be coming back because we’re still growing, but I think it’s going to shift to a larger corporate presence.” 

The state’s mushrooming unemployment figures are also troubling. More than 350,000 claims have been filed since the coronavirus outbreak several weeks ago. 

“These are huge numbers when we talk about hundreds of thousands of jobs lost or gained, we’re usually talking about the U.S. level,” Rounds said.

That’s where “fine tuning” and strategic long term planning will count, he said. 

Opportunity for a “huge” comeback 

If all the pieces come together, this could be an opportunity for the state, Rounds said. 

“Where I’m most optimistic among some of my colleagues, I feel like we can take advantage of this downturn, this crisis, and learn from it. 

“I would love to see Arizona be this huge immunology hub for the entire country going forward, a lot of high tech activities in healthcare. I’d like to see lot more manufacturing coming back and I’d like to see more suppliers locate locally because that increases the multiplier effects that creates all those jobs we talk about.”

Cover photo courtesy of KTAR.

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