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Posted by on Apr 27, 2010 in Breaking News, Economy, Law, Politics, Society | 0 comments

Petitions, Boycotts And Lawsuits – Arizona Gets What It Deserves

A former Phoenix City Councilman will start a petition drive today to repeal Arizona’s new anti-Latino legislation. Meanwhile the Mayor of Phoenix will ask his City Council to authorize a lawsuit against the state and has vowed to sue personally if the City Council declines. Other interests, Latino groups in particular, are vowing lawsuits and asking members not to spend money in Arizona.

Boycotts of the state are being organized. The City of San Francisco and the nation of Mexico are talking about ending business with Arizona and all private industries located there. The City Attorney of San Francisco is currently researching which Arizona contracts can be voided without penalty, and the City Council will later take up an official boycott. One private convention has been cancelled, and others are reconsidering their convention commitments. There is preliminary talk of a baseball spring training boycott.

Arizona is under attack, legally, politically and economically. The response from Governor Jan Brewer(R) has been to hold the line, defending the new law as constitutional and necessary, and pooh-poohing the economic impact of the law itself and threatened boycotts as insignificant. We’ll see. Petitions and lawsuits will wend their way through the process. The economic impact is a separate issue.

To understand the Arizona economy you must understand tourism and Latino demographics. The state, and local municipalities, profit from direct tourism taxation like room taxes at hotels, ticket taxes at events, transportation taxes for everything from rental cars to taxis, sales taxes, and gas taxes from tourists who drive in the state. In addition to direct taxation is the indirect taxation of businesses’ and their employees’ incomes who service the tourist trade. Beyond tourism, you must also understand that 1.65 million (27%) of Arizona’s population of 6.1 million are (legal) Hispanics. Demographics. The vast majority are gainfully employed, generating direct tax revenues to the state through income taxes and indirect state revenues through Arizona’s sales tax. There are another 500,000 “illegals” who spend money in the state.

Arizona’s public coffers are already in distress. The state has made drastic cuts in education and virtually all public services. It has gone so far as to shut down public bathrooms to save money. Municiplaities and county governments are at the breaking point. Arizona’s budget problems are among the worst in the country. And, while much of the country is seeing signs of economic recovery, Arizona’s unemployment rate has continued to rise in the past seven months, further stressing state revenues. This is the climate in which Arizona will face the economic fallout of its anti-Latino legislation.

Phoenix television stations are carrying interviews with local business owners in the tourist trade who are setting up email campaigns and phone banks to beg corporate and individual customers not to cancel trips and conventions. Some sheriff’s offices are suggesting they will not enforce the new law because of the strain on their local budgets. There will be a protest asking patrons not to attend the baseball game at Wrigley Field in Chicago today where the Arizona Diamondbacks are playing. And the impact is just beginning. The future of Latino spending in Arizona has yet to be fully organized, felt or anticipated.

Arizona has chosen to thumb its nose at an economically powerful part of its population and to anger an ever increasing segment of the national demographic. Combined with others sensitive to Latino issues we shall see what the Arizona legislature and its Governor have wrought for the economic welfare of the state, its businesses and all of its citizens who rely on the financial viability of the state and its business core. Governor Brewer thinks the financial fallout will be insignificant. Business owners are taking proactive steps that indicate a different opinion. I’ll put my money on the projections of the business owners whose livelihoods depend on being right.

Cross posted at Elijah’s Sweete Spot, where COMMENTS/DISCUSSION are Disqus™ enabled.