Moving forward

Here are the notable economic development policies passed through appropriations

The Arizona Legislature adjourned in mid-May to take a four-week break from its work. Lawmakers returned in mid-June with the hope of passing several bills before going home for the year. The break is due to the slim margins in each chamber and the travel schedules of some lawmakers.

Prior to the break, the legislature passed, and the governor signed a budget for Fiscal Year 2024, which begins on July 1, 2023, and runs through June 30, 2024. It includes several notable economic development policies passed through appropriations, including:

• Road and highway projects

The budget includes funding for more than 60 road and highway projects throughout the state. Some of the more notable projects include funding for the I-10 expansion between Casa Grande and Phoenix, the extension of the SR 24 in the Southeast Valley, Happy Valley Road improvements for the Taiwan Semiconductor Manufacturing Company facility in North Phoenix, and I-17 expansion from Anthem to Sunset Point.

• Acceleration of Arizona rural broadband

Lawmakers dedicated more than $23 million to help rural Arizona communities draw down federal infrastructure funding for broadband connectivity.

• STEM and workforce aid to community colleges

Arizona’s community colleges will receive $124 million, of which $14 million is dedicated to STEM and workforce development.

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New trade offices

The Arizona Commerce Authority receives funding for new trade offices in Canada, Germany, and East Asia.

• Microbusiness loan fund created

The budget created a fund for distributing grants to community development financial institutions (CDFIs) and eligible nonprofits with experience in lending for micro business loans. It defines micro businesses as Arizona businesses that are independently owned and operated and employ five or fewer people.

K-12 FUNDING

Arizona’s education system received a boost this year with an $88.6 million increase in ongoing funding, a onetime injection of $300 million, and $341 million appropriated for school construction and repairs.

In addition to tackling housing and rental tax issues, some of the bills legislators need to pass in June have an economic development focus. They include:

• Reauthorization of the Maricopa County Transportation Tax

Maricopa County’s half-cent sales tax is set to expire next year. It pays for highways, buses, streets, and light rail. Lawmakers need to pass legislation allowing voters to consider extending the tax before they return home. At issue is the funding for light rail. Some lawmakers want it included in the regional transportation plan. Others do not.

• Public infrastructure improvements for manufacturing facilities

Arizona has a program in the statute that captures the sales tax on construction materials for large-scale manufacturing developments and sends it back to the municipality to pay for the facility’s public infrastructure. For a local government to qualify for the state sales tax revenue, the manufacturing facility must agree to make a capital investment of at least $500 million in Maricopa County or $50 million in all other counties. The program is capped at a specified dollar amount that needs adjusting. TSCM, Intel, and the proposed LG facility in Queen Creek will use all the program resources if nothing is done. These large manufacturing facilities have an economic development multiplier effect on the entire Arizona economy. AAED continues to advocate for policies and legislation that make Arizona more attractive for business and job creation, and retention. If you have questions about these or any other economic development bills at the Arizona Legislature, please contact AAED at (602) 240-2233.

Carrie Kelly was the executive director of the Arizona Association for Economic Development (AAED).