Arizona’s economy starts with our youngest children

When Arizona business leaders talk about our state’s economic future, the conversation usually turns to jobs, water, workforce development, infrastructure and our ability to compete for new investment.

But strong economies aren’t built only with roads, buildings and business incentives. They’re built by people. And Arizona’s future workforce starts long before someone fills out a job application.

Quality early childhood care helps parents participate in the workforce today while preparing children to become the workers, entrepreneurs and community leaders Arizona will depend on tomorrow. For employers, inadequate access to child care can mean absenteeism, turnover, recruiting challenges and lost productivity.

Yet the Arizona funding model that supports early childhood programs has not kept pace with a changing marketplace.

Arizona voters created First Things First in 2006 and dedicated tobacco revenues to early childhood programs. Since then, consumer behavior has changed dramatically. Traditional tobacco use has declined while vaping and other nicotine products have become increasingly prevalent. Those newer products do not contribute to the early childhood funding model in the same way traditional tobacco does.

The result is a growing disconnect between the market of 2006 and the market of 2026, putting an Arizona investment in children, families and our workforce at risk.

The solution is straightforward: update the existing funding model to include vaping and other nicotine products.

This isn’t a new program or a new approach. It is a modernization of the system Arizona voters already approved so newer nicotine products play by the same rules as traditional tobacco.

It also protects an investment that delivers economic value to Arizona. An analysis by Jim Rounds’ Rounds Consulting Group found that First Things First-supported activity generates $323.6 million in annual economic output, supports 2,800 jobs and generates $8.5 million for the state General Fund without drawing from it.

For those of us in business, that matters. We expect investments to produce results, and we expect the government to be accountable for how resources are used.

First Things First was designed with those principles in mind. Parents and caregivers are recognized as a child’s first and most important teachers. Local regional partnership councils identify the needs of their communities and help guide investments. Resources are directed locally rather than through a one-size-fits-all approach from Phoenix.

Parents first. Local solutions. Accountability for results.

Arizona voters also understand the difference between updating an existing model and creating something new.

A recent statewide survey by Data Orbital of 600 likely 2026 general election voters found that 80% support updating the existing funding model to include vaping and other nicotine products, with support crossing party lines. By nearly a 2-to-1 margin, voters view the proposal as an update to the current model rather than something new.

The same survey found that 90% believe affordable, high-quality child care is important to Arizona’s economy and workforce.

The urgency is real. First Things First has already experienced significant reductions in available resources as traditional tobacco revenues have declined. Without an update, Arizona communities could face further reductions in services for young children and families.

Arizona has spent decades building a reputation as a state that plans for growth rather than waiting for problems to become crises. We invest in infrastructure before businesses arrive and workforce development before employers need the workers.

The Legislature now has an opportunity to apply that same approach to an Arizona model voters created 20 years ago.

Updating the existing funding model to reflect today’s nicotine market will protect an investment Arizona voters have already made, preserve local decision-making and accountability, and help ensure Arizona families and employers have the support they need to succeed.

The Legislature has an opportunity to act now to modernize the existing funding model before declining revenues force Arizona communities to make deeper cuts.

John Graham is Chairman and CEO of Sunbelt Holdings and a longtime Arizona business and civic leader. Melinda Morrison Gulick is Chief Executive Officer of First Things First, Arizona’s early childhood agency.