ith government leaders from Gov. Doug Ducey to Tucson Mayor Regina Romero urging people to stay home and bars, gyms, movie theaters and other businesses shutting down, it’s no surprise that unemployment numbers in Arizona are more than double what they were in March.
For the week ending July 18, more than 22,000 Arizonans filed initial jobless claims, according to the latest figures from the U.S. Bureau of Labor.
More unhappy numbers show that nearly 350,000 Arizonans were unemployed in June, down from a high of 473,000 in April but still enough to put the state’s unemployment rate at 10 percent.
That’s a loss of nearly a quarter million jobs compared to June 2019, according to Arizona Office of Economic Opportunity.
The sectors hit hardest between April and June were restaurants, bars, hotels and amusement attractions like movie theaters.
Compared to 2019 tax collections in the final quarter of the fiscal year, restaurant and bar tax collections were down by 32 percent, lodging tax collections dropped by nearly 63 percent and amusement tax collections dropped by nearly 67 percent.
Despite those woeful numbers, state revenues have weathered the outbreak much better than anticipated. Based on preliminary data assembled by the Joint Legislative Budget Committee, the state collected $10.97 billion over the fiscal year that ended June 30. That’s a drop of just 2.3 percent over the previous fiscal year.
But between the state’s additional spending in response to the virus and an influx of new federal dollars to offset some of those expenses, the state’s final balance has yet to be calculated.
Still, state budget forecasters believe that when all is added in, the state will finish fiscal year 2020 with a surplus.
That’s a bit of surprise, given that state budget forecasters had previously expected the pandemic to hammer tax collections. But while restaurants and bars and hotels saw huge losses, other sectors held up just fine.
Taxes on construction activity grew by 16.2 percent over the entire fiscal year and had double-digit growth between April and June. And retail tax collections remained strong; over the course of the entire fiscal year, that sector saw 4.3 percent growth over the previous year.
Income tax collections declined by 9.6 percent compared to the previous fiscal year, but those numbers are also skewed by the delay of the tax deadline to July 15.
Research Professor George Hammond, the director of the UA Eller College of Management Economic and Business Research Center, said he believed the state was performing better than he had originally forecast when the pandemic first hit for three main reason.
“First the outbreak was not as severe here initially as it was in the Northeast, so it did not have as much of a negative impact on consumer/worker behavior as initially feared,” Hammond said. “Second, the stay-at-home order was lifted earlier than assumed in the early projections, which assumed it would last through the summer. Third, the CARES Act, particularly the Pandemic Unemployment Assistance benefits, had a bigger than expected positive impact on household incomes and consumer spending.”