The 2016 legislative session included ongoing debates about the effectiveness of the Arizona Commerce Authority. Following a challenging Auditor General report and sunset review in the fall, the ACA pursued a renewal of their agency. Skeptical lawmakers opted for only a two year renewal, an atypical amount of time that reflected the legislature’s reticence.
Though the Commerce Authority regularly reports on its “successes” of bringing jobs to Arizona by giving taxpayer dollars away to select businesses, they are less likely to highlight their failures.
For example: last year the Authority promised $1.5 million in cash and tax credits if business health benefits company, Zenefits, could deliver on 1,300 new higher wage jobs within three years of expanding into Arizona. February of this year Zenefits announced it was laying off 160 workers from mostly their Tempe facility.
Now – Zenefits has announced its closing its sales office in Scottsdale, laying off more employees, and packing up to move those functions back to their headquarters in San Francisco. What was once touted as a giant success for the ACA, has proven to be much less fruitful.
Zenefits is in a complicated space, highly regulated and experiencing severe growing pains. This is all the more reason why gambling with tax payer dollars to subsidize businesses to come to Arizona is irresponsible. Zenefits, like all businesses, are best served by making their decisions based upon competitive logic. The free market is a built in mechanism to reward or punish businesses for the accuracy of that logic. When government steps in to incentivize certain business decisions, it creates distortions in the marketplace and unfair advantages.
The majority of Arizona’s jobs are created by businesses that “go it alone.” They don’t receive special incentives, tax breaks, or handouts. These job creators might not get the recognition, the ribbon cuttings, or the publicity, but they’re the back bone of our economy. It’s about time we recognize the thousands of businesses that start, grow, and thrive in Arizona – without the “help” of the Arizona Commerce Authority.