Arizona has among the highest inflation in the country, but there's a silver lining

It’s an issue Arizonans in particular need no educating about. They get a cruel, everyday reminder about the ravages of inflation more so here than in any other state.

Of the nation’s largest metropolitan centers, the Phoenix-Mesa-Scottsdale area led the country with the highest inflation rate, according to the U.S. Bureau of Labor Statistics. The latest release of National Federation of Independent Business’ monthly Small Business Optimism Index didn’t hold out much hope of things changing anytime soon.

The index showed that 32% of small business owners identified inflation as their single most important problem, the highest reading since the fourth quarter of 1980. It also helps explain why, according to the index, small-business owners who are expecting better business conditions over the next six months decreased one point, hitting the lowest level recorded in the 48-year-old survey.

Why the focus on small business? Because small business is no small matter in Arizona.

Arizona is making the right moves to help

Small businesses – nearly 4 in 5 nationally have fewer than 10 employees – account for 99% of all businesses in our state and employ 1.1 million Arizonans. That’s 43% of the workforce.

To defeat inflation means taking some of the fight to Main Street – and that means putting the right state and federal policies in place.

What to do? The first and most important answer is do no further harm. The second answer is to listen to the problems and concerns of small businesses. I am pleased that Arizona’s governor, the Legislature and one of our U.S. senators have been doing both.

This year alone, legislation was passed and signed into law by Gov. Doug Ducey reducing the commercial property assessment ratio (Senate Bill 1093), lowering business personal property taxes (House Bill 2822) and protecting small businesses from erroneous litigation (Senate Bill 1157), just to name a few of the helpful legislative bills for small business.

Throw in the court decision striking down Proposition 208, which would have significantly increased income taxes for thousands of Arizonans and small business owners, making Arizona the 10th highest taxing state in the nation.

Sinema has helped block other harmful policies

We can say, without qualification, that Arizona’s small businesses are on more solid economic terra firma than their Main Street counterparts in other states.

Unfortunately, there are congressional initiatives that aim to counteract the good done here. A few of the many harmful proposals include expanding the reach of the 3.8% Small Business Surtax, limiting the Small Business Deduction (Section 199A), and increasing corporate and capital gains taxes.

For now, none of these proposed impediments to the small business recovery have been enacted, and a great deal of the credit goes to Arizona’s senior U.S. Sen. Kyrsten Sinema.

Sen. Sinema has been an unbreachable firewall against small-business-harming congressional initiatives and her recent remarks that she will oppose "any tax policies that would put a brake on any type of economic growth or forestall business and personal growth for America's industries,” were reassuring.

All the good that the governor and state Legislature have done could be strongly diluted with a bad federal law. Our state, our nation, can’t afford this.

Everyday Arizonans feel the strain of our current economic weaknesses, from record-high prices on fuel and life’s essentials to the overabundance of help-wanted signs in many small-business windows.

We will turn the corner, this too will pass, and thanks to the teamwork of Arizona’s governor, Legislature and Sen. Sinema supporting the right inflation-fighting policies, Arizona is poised to rebound faster than most other states.

Chad Heinrich is Arizona state director for the National Federation of Independent Business and managing partner for Heinrich Public Affairs in Phoenix. Reach him at ch@chadheinrich.com.

This article originally appeared on Arizona Republic: Why Arizona is in better shape to deal with inflation