˿Ƶ

Report estimates rejected Arizona bills could have cost 424,000 jobs, $48 billion in GDP

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 ˿Ƶ 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 ˿Ƶ 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 ˿Ƶ 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.” 

Add comment

Subscribe to the Dry Heat

Get updates on the most important news delivered right to your email. Fully personalized options. No SPAM. Unsubscribe anytime.

Let’s Get Social

˿Ƶ Business News wants to connect with you. Follow us, tweet, share, post, comment... however you get social is the perfect way to connect.