Arizona's 'religious freedom' bill. How much would it cost the state?

As Arizona Gov. Jan Brewer (R) weighs whether or not to sign a bill allowing private business owners to refuse to serve gay and lesbian customers in the name of "religious freedom," opponents of the measure are urging the governor to think hard about the economic consequences to the state if it becomes law.

Arizona’s US Senators, John McCain and Jeff Flake, have both said they hope that Governor Brewer does not sign, and Apple Inc., which has announced plans to build a manufacturing plant in Mesa, Ariz., reportedly has urged the same.

Doug Parker, CEO of the new American Airlines Group, sent the governor a letter in which he discusses the state’s economic comeback and says, “There is genuine concern throughout the business community that this bill, if signed into law, would jeopardize all that has been accomplished so far.”

But the highest potential stakes involve the Super Bowl, which is scheduled to be played in Arizona in 2015. On Monday, the state Super Bowl Committee added its name to a letter urging the governor to veto the bill.

“The big question is will the NFL take away the Super Bowl next year?,” says Matthew Hale, a political scientist at Seton Hall University in South Orange Village, N.J. “The NFL has a history of homophobia and bullying, and the first openly gay player is coming in the next draft. As a result, the pressure on the NFL to take away the big game" if the bill becomes law "will be tremendous.”

If Arizona loses the Super Bowl because of antigay legislation, it would be "a true watershed moment in the fight for LBGT equality," he adds.

In urging a veto, many critics of the bill cite the negative economic fallout from SB 1070, the controversial immigration law that Arizona passed in 2010 authorizing police to stop people they felt looked like illegal immigrants. The so-called "show me your papers" law, much of which was struck down eventually by the US Supreme Court, generated headlines worldwide portraying the state as intolerant. Tourism income faltered, conventions were cancelled, and Arizona became the butt of late-night comics.

A study by the left-leaning Center on American Progress calculated that national opposition to Arizona's immigration bill produced "hundreds of millions of dollars in lost direct spending in the state and diminished economic output" through convention cancellations alone.

Critics say that the state would be in for a repeat if the "religious freedom" bill becomes law.

“This legislation has already hurt Arizona and it will continue to harm the state should it become law,” says Mark Tatge, a communication professor at DePauw University, in Greencastle, Ind.

“Basic economics play the biggest role in a corporation's relocation decision. But corporate image plays a role, too," he adds. "Companies, particularly those that offer partner benefits, don't want to be in the situation of discriminating in one state and pursuing an agenda of anti-discrimination in others. It is hypocritical, but it also opens a litany of legal issues. I predict this bill will force companies to rethink expansion plans should it become law," he adds.

Some economists dispute such assertions.

Arizona’s amenities for businesses may trump the controversy, says economist David Fiorenza at Villanova's School of Business. “Cities are economically harmed more by disasters and other factors related to the city such as crime or poverty than by politics,” he says. “Tourism continues to thrive in cities that have political issues, because cities in Arizona and elsewhere offer other amenities that attract people in the areas of arts, culture and entertainment.”

But some legal analysts say the press and public alike are so far missing a key point about the legislation. It does not mention lesbians, gays, or same-sex marriage overtly at all. On the surface, at least, it is aimed at expanding to the business sector rights previously held only by churches and synagogues, namely the right to hire and fire based on religious beliefs.

While some Republicans have argued that the law is just a minor adjustment to existing religious protections, some legal analysts say the law, if signed and upheld, would set a huge precedent in expanding such protections.

So far, there seems to be no shortage of commentary and predictions about what Brewer could and should do.

With gay marriage protected by law in some 20 states, "the tide of this development is certainly not in Brewer's favor if she is inclined to sign it,” says Len Shyles, communication professor at Villanova University.

However if the governor vetoed the law, her political base would likely dwindle, he adds. "So, in terms of the realpolitik associated with her political survival, she is in a better position to retain her office if she signs."