Arizona continues to grapple with economic and environmental challenges as it enters the second quarter of 2025. The state legislature recently passed a controversial bill expanding local law enforcement's authority to enforce immigration laws, modeled after Texas' SB4. Governor Katie Hobbs signed an executive order launching Operation Desert Guardian to bolster border security efforts, building on previous initiatives that have intercepted millions of fentanyl pills at ports of entry.

On the economic front, Arizona is projected to outpace national job growth in 2025, with the University of Arizona forecasting about 2% regional employment gains. However, the housing market remains tight, with the Cromford Market Index indicating a seller's advantage. The technology sector continues to drive economic activity, with the Arizona Technology Council expressing cautious optimism about the industry's role in shaping growth despite geopolitical uncertainties.

Environmental concerns loom large as Arizona experiences one of its driest winters on record. The U.S. Drought Monitor reports that 100% of the state is under pre-drought or drought conditions, with the most severe impacts in western Arizona. This has raised alarm about potential dust storms and wildfire risks in the coming months. The National Weather Service Climate Prediction Center's outlooks favor warmer and drier conditions for Arizona through spring, which may exacerbate these concerns.

In education news, state lawmakers are debating measures to address teacher shortages and improve student outcomes. Meanwhile, infrastructure projects continue to progress, with several major road improvements underway in the Phoenix metropolitan area to accommodate the region's rapid growth.

Looking ahead, all eyes are on the upcoming special election, with candidate filing set to begin in mid-March. Additionally, water conservation efforts are expected to intensify as the state grapples with ongoing drought conditions and their potential impact on the Colorado River water supply. Economists will be closely watching inflation and employment data in the coming months to gauge the health of Arizona's economy amid national uncertainties.