If the economic indicators are correct, Arizona has finally pulled out of its dive and may be stabilizing.
Some key indicators include:
• The unemployment rate rose to 9.5 percent in February at the same time that 20,000 new jobs were created.
• Sales tax collections were down in February, the 24th straight month of year-over-year declines, but the rate of the decline, 8 percent, broke a string of double-digit declines over the past 15 months.
• General Fund revenues were down $48 million in February, but it was the second month in a row of single-digit declines compared to last year.
“It’s what we said before, you have to hit bottom before you can take off,” said Rep. John McComish (R-Ahwatukee Foothills).
“It appears we have hit bottom,” said McComish, who was “cautiously optimistic.”
It shouldn’t come as a surprise that, according to the Joint Legislative Budget Committee, personal income in Arizona fell by 2.7 percent last year. Job loss in Arizona was also more than originally expected, with the state shedding 323,700 jobs since December 2007 when the recession began.
But initial claims for unemployment in February, while still high at 23,411, were down 25 percent from January and the lowest since August 2008.
Even the real estate sector appears to be holding its own, with new home construction permits up from the low of February 2008 when just 799 permits were issued, to a more acceptable 1,269, still way down from the 10-year average of 4,772.
One bump that could derail the recover is the passage of health care reform.
The Joint Legislative Budget Committee said at one point that health care reform could save Arizona $2.3 billion through 2020, but in another section of the monthly report, said it could cost Arizona $7.5 billion.
McComish said that it took months for officials to decipher the details in the federal stimulus package and it will probably take that long or more to completely understand health care reform and its impact on Arizona.
But at this point, while the details aren’t clear, McComish said officials are bracing for increased costs that could hit $1 billion over the next few years.