Republicans in the Legislature want to require all state employees to return to the office, but the Arizona Department of Administration says there isn’t enough office space for them to return.

Senate President Warren Petersen, R-Queen Creek, introduced Senate Bill 1237 to prohibit remote work for those employed by the state, saying he wants to increase productivity among state employees. He blamed the rise in remote work on the Covid pandemic and said workers should return to the office now that the pandemic is over.

However, the state has been selling off or demolishing its office space over the past eight years as remote work became more popular. Now, ADOA, which oversees state properties, estimates that it would need 1.5 million square feet of office space to accommodate the return-to-work order mandated by the bill.

“This would require significant expenditures for state-owned buildings and increased leased space,” an ADOA spokesperson said in an email.

In an emailed statement provided through a spokesperson, Petersen suggested the state should eliminate jobs to accommodate the return-to-office mandate.

Petersen wrote: “Before the pandemic, most state government employees were working in-office. State agency budgets did not receive impactful cuts during or after the pandemic. So, if poor decisions made by the Executive Branch now require the leasing of office space, now would be a good opportunity to audit our state agencies to shrink government and eliminate unnecessary positions to save taxpayer dollars.”

As of December 2024, 41% of state employees worked remotely either full-time or on a hybrid basis and 64% of state employees in Maricopa County worked remotely at least one day per week. ADOA estimates that remote work has saved the state around $32 million annually in rent costs and an additional $58.6 million in deferred maintenance costs since fiscal year 2021.

Remote work is not a new concept in Arizona. According to a fact sheet prepared by Senate staff, “telework” was first piloted in the state in 1990 to reduce air pollution caused by employees commuting to the office. The program was formally adopted in 1993 and last updated in 2003.

Even former Republican Gov. Doug Ducey touted the benefits of telework during the pandemic, noting that reducing government office space saved the state $9 million in rental costs between 2020 and 2022.

Petersen’s bill — and his desire to cut state jobs — seems to be inspired by President Donald Trump’s return-to-office mandate and mass layoffs for federal workers. But Petersen also pointed to an order from Minnesota Gov. Tim Walz, a Democrat, which requires state employees to return to the office at least 50% of the time.

Petersen’s bill was amended to allow employees to work from home if they are sick, as long as they coordinate with their supervisors. But some say lawmakers have failed to take other issues into account.

A few state agencies, including the State Board of Pharmacy and the Attorney General’s Office, have formally opposed the bill. Kam Gandhi, the executive director for the Pharmacy Board, said he has heard from several agency directors that they are opposed to the bill, partially due to space constraints.

“I am hearing that from other agencies, that that’s not going to be possible for them because they just don’t have the space,” Gandhi said.

And space isn’t the only issue agencies are concerned with. Without the benefit of remote work, supervisors are worried that the often-low salaries for government work won’t be enough.

Gandhi said the Pharmacy Board opposes the bill because remote work has become a valuable tool for recruiting and retaining employees.

“My concern is we would lose good people if we went this route and implemented (SB)1237,” Gandhi said.

He also disagreed with Petersen’s argument that remote work makes employees unproductive, saying he has not noticed a decline in his employees’ productivity.

“We made it perfectly clear to our employees that this hybrid work environment is a privilege, not a right,” Gandhi said. “So if productivity does slide, then there’s a period of time we may call you back into the office full-time because of that concern, and because it’s been well explained to them, I don’t think we’ve had an issue.”

Richie Taylor, communications director for the Attorney General’s Office, said remote work is also used in recruiting staff for that office, especially as state salaries have not increased with inflation.

“Remote work and a hybrid work option is one of the main recruiting tools that we have given the Legislature’s ongoing failure to fund competitive salaries for state attorneys, particularly compared to larger counties like Maricopa County and some of the big municipal governments,” Taylor said.

According to a workforce report provided by ADOA to the governor and the Legislature, state employee salaries rose by 1.4% during fiscal year 2024, compared to a 4.1% average salary increase for other public and private sector workers in the same fiscal year.

Taylor said some staff from the Attorney General’s Office share office space with other agencies whose working space has been reduced or eliminated, which could also make it harder for AGO staff to return to those office spaces.

However, Petersen is not backing down, despite the issues raised by state agencies.

“If the leasing of office space is still required, it would be a good time to do so, as commercial real estate values are plunging,” Petersen said in a statement. “Meanwhile, Arizona’s private sector employees at companies like Amazon, Boeing, Walmart, Honor Health, and many others, are back in the office, so government workers should be doing the same.”

Petersen’s bill passed out of the Senate in February and is expected to pass out of the House in the coming weeks. It is likely to receive a veto from Gov. Katie Hobbs, but her office does not comment on pending legislation.