California East

Glenn Hamer

April 26, 2016

The November 2016 state ballot has the potential to inflict tremendous damage on the economic progress Arizona has made in the last several years. Numerous proposed ballot initiatives read like they were written during an all-nighter at Bernie Sanders campaign headquarters.

Consider the issues that Arizona voters might be faced with on the fall ballot: minimum wage hikes; caps on executive compensation; energy distribution mandates; taxpayer-financed political campaigns; and recreational marijuana.

Passage of any of these initiatives would put Arizona’s competitive standing at real risk and permanently harm our state’s ability to attract and retain jobs. And because of our so-called “voter protection” statute, which makes altering voter-approved measures nearly impossible, the damage could be set in stone. Come Election Day, Arizona could morph into California East, and not because of anything done by the governor, Legislature or any elected officials.

Wage mandates from the entry level to the executive suite

An organized labor group wants to take the state minimum wage up $12 per hour, impose paid leave mandates on employers, and allow cities to form their own wage ordinances. An activist group in Flagstaff is circulating a petition to ask voters to hike that city’s minimum wage to $15, which California is on its way to doing, as well as New York and cities like Seattle. Proving that bad ideas apparently get worse with altitude, the Flagstaff initiative would ensure the local wage there is always at least $2 higher than the state minimum wage.

There’s more bad news on the wage front. While some groups want to establish a wage floor, another wants a compensation ceiling. SEIU-Healthcare Workers West is circulating a petition to send to the ballot the question of whether to cap the total annual compensation of health care leaders. Where else is a similar effort underway? Head west, progressive activist.

All of this leads to a certain type of human resources department nightmare where hiring becomes too expensive at the first rung of the career ladder, but makes talent acquisition and retention almost impossible at the top end of the ladder.

Making energy more expensive

The direct democracy crowd also wants to enshrine its agenda in the state constitution via an initiative that would make electricity more expensive as a result of mandates on utilities’ management of solar energy.

The end-run around the Arizona Corporation Commission would prevent utilities from taking steps to shield their non-solar customers from higher rates caused by solar customers who don’t pay their fair share when they’re not producing power. And what about the maintenance of the grid? Solar customers won’t pay under this proposal even though they are using the grid as their battery. This effectively sticks non-solar customers with the bill.

Don’t fall for the argument that solar energy is under attack. There’s a federal 30 percentsolar investment tax credit on commercial and residential installations. We have a state-levelRenewable Energy Tax Credit. The Solar Energy Industry Association ranks Arizona number 2 nationally for installed solar electric capacity. The Agua Caliente project outside Yuma, Ariz. is one of the world’s largest solar arrays. Arizona loves solar energy, but we need to ensure its long-term sustainability here with smart policies.

Who’s expected to bankroll this campaign? California-based solar companies.

This ad brought to you by Arizona taxpayers

Arizona’s taxpayer-financed election scheme would get a booster shot if proponents of yetanother proposed ballot initiative get their way. They’re circulating a petition that would establish a new matching funds provision (even though the US Supreme Court ruled the previous matching funds construct unconstitutional), increase funding to taxpayer-financed candidates, while limiting the amount traditionally funded candidates can raise from individual donors. More to the point, the free speech of private donors who want to participate in the political process would be greatly diminished.

Taxpayer-financed elections are a bad idea, one of the worst to come to pass in Arizona politics in the last few decades. This measure is a bad idea on steroids. Of all the challenges facing Arizona, taxpayers should not be forced to bankroll robocalls and junk mail. 

Proponents of initiatives like these (and yes, organizers are attempting to send a taxpayer-financed campaign scheme to the ballot in California) say they’re trying to reduce the influence of money in politics. What they’re really doing is reducing the influence of free speech in politics.

Recreational marijuana coming to a ballot near you

With each passing day, it becomes more and more likely that voters will be asked in November whether to legalize the recreational use of marijuana. While the other initiatives are just getting underway and would have to gather hundreds of thousands of signatures in a short timeframe, the pot party in Arizona has been gathering signatures for several months,just as it has in California.

The business community is urging Arizonans to vote no. There is no compelling public policy reason to bring the legalization experiment here. Legalization harms our talent pipeline through its adverse effects on adolescents’ brains. It leads to increased workplace and automobile accidents. It leads to an increased likelihood of the use of harder drugs, which increases rates of addiction and the rehabilitation, law enforcement and other societal costs that result.

The claims of a boost in tax revenues are a myth, canceled out by the bureaucracy that must be stood up to manage the buying and selling of a substance still considered illegal by the federal government.

Arizona should not take the hit.

Too much at stake

The American Legislative Exchange Council’s “Rich States, Poor States” report ranks Arizona number 5 nationwide for economic outlook. The state is on track to have a record number of workers in fiscal year 2017. All of the jobs lost in Arizona during the Great Recession have been recovered.

We are clearly on the right track. Let’s not scuttle all the great progress we’ve made by passing out-of-state special interests’ poorly conceived ballot initiatives that will make it harder to hire, increase the cost of energy, waste taxpayer dollars on political campaigns and bring a risky drug legalization experiment to Arizona. It’s not worth the risk. We have too much to lose.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry