It was a tale of two sessions.
As New Mexico lawmakers prepare to return to Santa Fe to meet the budget-passing obligation they avoided months ago, Arizona’s legislators are heading home. There will be no special session for the Grand Canyon State, which not only adopted a fiscal plan that included no tax hikes but also enacted a number of bold reforms that will boost education quality and economic development.
Arizona was one of the states most devastated by the housing bust and financial crisis. In December 2009, unemployment there reached at a jaw-dropping 11.2 percent, almost three percentage points higher than the peak jobless rate in New Mexico. Now, Arizona’s unemployment rate is 5.0 percent – just a bit higher than the national figure. Jobs there have surpassed their previous total and continue to grow. Since hitting rock bottom, nonfarm employment in Arizona has surged by 15.4 percent.
The comparable data for New Mexico are depressing. We have yet to regain the jobs lost during the Great Recession – one of only a few states claiming that dubious distinction. Unemployment here is 6.7 percent, the highest in the nation.
Arizona’s had wiser public policies than New Mexico for decades, and there’s no question that its pro-growth, pro-taxpayer posture helped it climb back from hard times just a few years ago. But this session, legislators in Phoenix went further, embracing deregulation in ways that Santa Fe should notice.
In his January State of the State address, Gov. Doug Ducey observed that Sandra Day O’Conner had been a member of the Arizona legislature, serving as “the first woman majority leader … in the entire country” before becoming the first woman to serve on the U.S. Supreme Court. But “after her retirement in 2005, if she had wanted to teach civics in an Arizona high school classroom, she would have been deemed unqualified by the system.” So when legislators passed a bill that requires the adoption of “substantially different” rules for “alternative teacher and administrator preparation programs,” the governor eagerly signed it, calling the legislation a tool to empower principals “to make hiring decisions and attract the best individuals to serve our students.”
Reforming who can work in government schools was good. Expanding choice was better. Arizona already had a limited form of education savings accounts prior to the session, but Ducey and the legislature made “Empowerment Scholarship Accounts” universal. Now parents of any type of student will receive an average of $5,600 for tuition, tutoring, homeschooling materials and other qualified expenditures. (An enrollment limit was established, but look for that stricture to be loosened in a state that has long been a choice pioneer.) Research has shown ESAs to be very popular and employed in a myriad of ways. Furthermore, many parents have “skin in the game” by augmenting an ESA with their own financial contributions to their children’s education needs.
Finally, Arizona has put occupational licensing under a microscope. Barack Obama’s Council of Economic Advisers concluded that “the current licensing regime in the United States … creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities and make it more difficult for workers to take their skills across state lines.” Arizonans will soon benefit from the Right to Earn a Living Act, which bars state bureaucracies from promulgating regulations that “on their face or in their effect limit in the entry into a profession or trade,” unless justified by health/safety concerns….With the worst dropout rate in the nation, the Land of Enchantment is in desperate need of sweeping changes in education. And with arguably the bleakest economy in the country, entrepreneurs and workers need relief, fast. In 2017, we’ve seen how the New Mexico and Arizona legislatures take very different policy paths. It’s a divergence that produces drastically different results in the two states.
The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.