January 18, 2017

The Impacts of the Election in Arizona and Projections for 2017

The only poll that matters is the one taken on Election Day when voters go to the polls and cast their votes.  This was especially true this year.  Nationally, the presidential election certainly proved the pollsters wrong.  In Arizona, pollsters also got it wrong.  All of the hype that Arizona was turning blue was laid to rest on November 8.  As the votes came in, Donald Trump won Arizona rather handily and the Republicans maintained solid majorities in the Legislature.  In fact, Republicans managed to maintain control of all of the statewide elected offices that were up for grabs.  Republicans swept the Corporation Commission races and Sen. John McCain defeated Congresswoman Ann Kirkpatrick.  The balance of the congressional seats also stayed the same.

In the legislative races, Democrats gained in one district, but lost in another to make it a net zero gain for either party.  However, it is noteworthy that the two Democrat gains were in Maricopa County, a very urbanized area.  Republicans picked up their seats in rural districts that currently maintain a Democrat registration advantage.  While the changing dynamics of the voting population in Arizona could certainly shift the politics of the state to the left in the near future, it didn’t happen in 2016.

Though the majorities didn’t change in the Arizona Legislature, the faces occupying many of those seats did.  Term limits have given us a larger-than-normal crop of new legislators on both sides of the aisle.  Further, with the speaker being termed out and Senate President Andy Biggs’ election to Congress, both the House and the Senate will start the New Year with new leaders.  Speaker J.D. Mesnard hails from Chandler.  Mesnard, in his mid-30s, is very young compared to his predecessor.  He also admits that he doesn’t know much about agriculture.  To his credit, one of his first moves was to appoint Rep. TJ Shope to serve as speaker pro tem, acknowledging that the chamber needed someone in leadership who understood agriculture and the rural areas of the state.

Newly-elected Senate President Steve Yarbrough has been around the Legislature for quite some time and he also comes from a suburb in east Phoenix.  While Yarbrough isn’t from an ag district, he was the sponsor of a Western Growers bill a few years ago to change an Arizona statute to make it easier for growers to donate crops to food banks across the state.

Though the politics in Arizona didn’t shift much through this election cycle, the labor laws in Arizona were changed dramatically as a result of Proposition 206.  With its passage, Arizona’s minimum wage rose to $10 per hour on January 1, 2017, and will hit $12 per hour in 2020.  The biggest impact might be the mandated sick leave provisions that will go into effect this summer.  Unfortunately, the business community in Arizona was unable to coordinate a successful “no” campaign and the impacts of the new law could cause budget issues in public school districts across the state.  In addition, state contractors are asking for increases to comply with the new law.  These additional cost burdens on the state may give way to a lawsuit challenging the validity of the new wage law, as Arizona requires any initiative that causes the state to expend additional revenues to provide a specific funding source.  It remains to be seen if and when a lawsuit will be filed and to what extent it will prevail in rolling back these new mandates.  (After this article was written, a lawsuit was filed but rejected by the Arizona Supreme Court.  The new minimum wage has gone into effect.)

Looking forward to the legislative session, the state has ample revenue projections.  The days of massive cuts to government services should be history for now.  There will be a lot of different interests vying for a piece of the additional general funds: state agencies, roads, and education among them.  With the positive economic outlook and Governor Ducey’s campaign promise, it’s likely there will be additional tax cuts enacted as well.

Change always presents opportunities, and WG is working to educate all of the newly-elected legislators from both sides of the aisle on the importance of the agriculture industry in Arizona and its $17 billion economic impact to the state.