For over 14 years Utah has been ranked #1 in the nation for the best economic outlook by ALEC’s “Rich States Poor States”. However, one state that is hot on our heels is our neighbor to the south  – Arizona.

In the latest rankings, Arizona has closed the gap on Utah and now sits at #3 on the list. Within the last year Arizona has passed two major pieces of legislation that will likely vault Arizona to the #1 spot in the country as the best place to live and do business. Utah’s 14 year run as the nation’s leader in “Best Economic Outlook” could soon be in danger.

TAX CUTS

The first taxpayer friendly move they made last year was to pass a substantial and well-crafted income tax cut that vaulted them ahead of most states, and especially Utah. Their legislature passed and the Governor signed Senate Bill 1828, which is a $1.9 billion dollar tax cut for Arizona taxpayers. 

It will cut the income tax rate from 4.5% to a flat 2.5% once revenue triggers are hit. This constitutes almost 15% of their budget and shows a massive commitment from Arizona’s elected officials to do the right thing in putting more money back into the pockets of taxpayers. It also shows strong leadership in raising Arizona as the beacon of attractiveness for capital, companies, jobs and wealth.

When one compares the size of Arizona’s tax cut to Utah’s recent cut of 0.10% (4.95% to 4.85%) as a percentage of the budget it is obvious how vast of a difference there is:

EDUCATION SAVINGS ACCOUNTS (ESA’s)

The second move Arizona made just happened a few weeks ago, when they passed House Bill 2853, which expands Arizona’s wildly popular Education Savings Account (ESA) program to every single family in the state. Arizona believes the choice of where a child is educated belongs to the parents and students.

Families who wish to participate will now be eligible to receive approximately $7,000 per child each year into an ESA for virtually any kind of educational service that they feel best suits their child. Whether it is a private school, homeschooling, learning pods, tutoring, or other formats, the choice lies with the parents and students. The program ensures the funding for each student follows the student. If parents feel that their child is best suited by remaining in the current public or charter school, they have that option available of course.

Arizona taxpayers will see savings for each student that participates in the program since the $7,000 of funding they receive is markedly lower than the more than $11,000 state and local taxpayers spend on each public school student. Consequently, per-pupil funding will increase as the program grows. While a limited ESA program has been in place in Arizona since 2011, this has, in fact, happened. Per pupil funding has grown almost $1,600 per student over the past decade while the number of students with ESA’s has grown by almost 10,000. Arizona’s ESA program now sends over $6 million dollars per year in state funding (not including local and federal funding) back to other public school students each year.

Arizona’s new ESA program is the gold standard for what can be implemented. While taxpayers in Utah and other states continue to funnel more and more money into public education and see no improvement in results, Arizona’s legislature and Governor are leading the way in directing their taxpayers money into far more cost effective programs.

Arizona is blowing Utah out of the water in these areas. Given these developments over the past year, elected officials need to get their act in gear.