Out Leadership’s Business Climate Index for the 50 United States is an assessment of states’ performance on LGBTQ+ inclusion. It measures the impact government policies and prevalent attitudes have on the LGBTQ+ people residing in each state, quantifying the economic imperatives for inclusion and the costs of discrimination. It equips business leaders and policymakers with a clear sense of the most impactful steps states can take to make themselves more hospitable to forward-thinking, innovative, inclusive businesses.
out of a possible 100 points
Arizona has no statewide nondiscrimination law protecting sexual orientation or gender identity, though local laws in six municipalities cover large swathes of the state. An executive order prohibits discrimination against state employees based on sexual orientation but not gender identity. The state requires gender confirmation surgery to change birth certificate gender markers. Gender markers on driver’s licenses cannot be changed before first going through the process of amending gender markers on Social Security Records.
There is no law against conversion therapy in Arizona. The state repealed its prohibition on discussion of LGBTQ+ issues in schools in 2019.
With the exception of Sen. Kyrsten Sinema, the nation’s first openly bisexual U.S. Senator, Arizona’s statewide public officials generally uphold pro-religious, anti-LGBTQ+ status quos in the state. Broad religious exemption laws apply to nondiscrimination laws in Arizona.
Gender confirmation surgeries are not covered by Arizona Medicaid, and the state has no laws banning transgender healthcare exclusions by insurers, though it just lost a case for denying that coverage to state employees. The state has seen (so far unsuccessful) attempts to ban transgender health coverage outright. Broad hate crime protections are in place for individuals on the basis of sexual orientation, but not gender identity. HIV exposure is not specifically criminalized but can be prosecuted under general laws or contagious and infectious disease statutes.
Ten percent of transgender employees in Arizona reported being harassed in the past year due to their gender identity and 28% report mistreatment (i.e., being told to present in the wrong gender) in order to keep a job. Thirty-one percent of LGBTQ+ individuals in Arizona reported food insecurity, almost double that of the non-LGBTQ+ population. LGBTQ+ unemployment in Arizona (9%) outpaces that of the non-LGBTQ+ population (6%).
Download this report to learn how and why Out Leadership created the LGBTQ+ Business Climate Index for the 50 U.S. States, with important details about our methodology, including our data standards and practices. NOTE: *HIV criminalization laws are discriminatory and ineffective. These laws fail to account for advances made in treating and controlling HIV, may deter people from getting tested and seeking treatment, and can exacerbate the stigma targeting people living with HIV and LGBTQ+ people.Our Methodology
The legal and cultural situation for LGBTQ+ people varies widely across the country. This map, based on each state's total Business Climate Score, illustrates the states where LGBTQ+ people are empowered to participate more fully and openly in the economy, and the states that are lagging behind.
Our partnerships make our work possible. The first State LGBTQ+ Business Climate Index released in 2019 was funded by a grant from the Gill Foundation. The Index is based on data graciously shared by the Movement Advancement Project and the Williams Institute. Ropes & Gray is our pro bono legal partner for the CEO Business Briefs globally, and their research informs this Index. FCB partnered with us to conduct original market research into American attitudes toward LGBTQ+ workplace inclusion, informing the Regional Context section of the State CEO Briefs. America Competes supported the development of the scoring for the Risk Assessments, particularly for the Future Risk score.
Out Leadership and FCB partnered on original market research into the attitudes of American workers on LGBTQ+ inclusion, which fielded in 2019 and 2020. These briefs as a whole will be updated on an ongoing basis by Out Leadership because we recognize the ever-changing nature of policy on the local, state, and national level.
The Southwest region had the lowest percent of non-LGBTQ+ respondents being willing to self-identify as an ally (44%), but, surprisingly, had the highest percentage of respondents classifying as LGBTQ+ friendly (slightly over 90%). Over half of the of LGBTQ+ workers in the Southwest are out at work (54.4%, second behind the Southeast region) and LGBTQ+ workers in this region are also 14% less likely to feel they need to engage in covering behaviors around their sexual orientation at work to be successful. However, state leadership in this region is not seen as very inclusive, and workers were 36% more likely to say that their leadership speaks about LGBTQ+ in predominantly negative terms. This region was also 43% more likely to list “including visibly LGBTQ+ people in advertising and communications” as one of the top ways that business could demonstrate their support. However, the non-LGBTQ+ respondents in this region were the least likely to list public demonstrations of support as one of the top ways that businesses could express their commitment to the LGBTQ+ community. Particularly around marketing to LGBTQ+ customers and public advocacy (77% and 50% less likely respectively).
Unless otherwise noted, all comparisons for more or less likely are compared to the National results. Regional results are based off of 1,500 respondents (LGBTQ+ and Non-LGBTQ+ responses have been weighted to be age-representative for each audience in each region). National results are based off of 600 respondents representative of each audience (LGBTQ+ vs Non-LGBTQ+).
States in the Southwest region included: Arizona, New Mexico, Oklahoma, Texas
Legal Status of the Lesbian, Gay, and Bisexual Community
Arizona’s nondiscrimination law does not include sexual orientation or gender identity, though there have been many attempts to change this, including in the 2020 legislative session However, the cities of Flagstaff, Phoenix, Sedona, Tempe, Tucson and Winslow have banned discrimination on the basis of sexual orientation and gender identity in the areas of housing, employment (both public and private), and public accommodations. Phoenix’s anti-discrimination law is was challenged in 2019 before the Arizona Supreme Court which upheld its legality.
The definition of a “dependent” of a state employee eligible to receive state-provided insurance is limited to “spouses under the laws of” Arizona. Although the 2011 ruling Brewer v. Diaz enjoined Arizona from denying benefits to domestic partners of gay and lesbian state employees, the definition has not been changed.
The 2001 Arizona Equity Act repealed Arizona’s sodomy laws and legalized homosexuality.
Malice because of the victim’s sexual orientation, or the victim’s perceived sexual orientation, is considered an “aggravating circumstance” for sentencing purposes in Arizona.
There are no express protections for youth in the foster care system from discrimination on the basis of sexual orientation or gender identity.
Legal Status of the Transgender and Gender-Diverse Communities
A 2003 executive order prohibits discrimination in state employment based on sexual orientation, but not gender identity.
A person who has undergone a gender confirmation surgery or has a chromosomal count that establishes the sex of the person as different than that on the registered birth certificate can amend their birth certificate by providing the state registrar with a written request (if the person is a minor, a guardian must write it). The request must be accompanied by a written statement from a physician that verifies the operation or chromosomal count.
To change the gender marker on an Arizona driver’s license, the person must first change it on their Social Security Record. The Arizona Department of Transportation website states that it takes two days for the Social Security Administration’s computer system to update.
Gender confirmation surgeries are not covered by Arizona Medicaid, and the state has no laws banning transgender healthcare exclusions by insurers. In January 2019, a transgender university professor sued the state over an exclusion in its employee healthcare plan that prohibits insurance from covering transition-related expenses such as gender confirmation surgery. The court ruled for the plaintiff in early 2020. In 2021, courts ruled against two trans teens who were denied gender affirming care under their state Medicaid plan. The plaintiffs plan to appeal.
Malice because of the victim’s gender identity does not constitute an “aggravated circumstance” for sentencing purposes in Arizona. Gender identity is not included in the information-collection purview of The Arizona Highway Patrol or the Arizona Peace Officers.
Government Statements and Actions
In April 2021, Gov. Doug Ducey vetoed a bill that would have prohibited schools from teaching LGBTQ-related curricula without parental consent. However, he also issued an executive order stating that all sex ed curriculum should be available for parents to see online, and parents must be included in any process to change it.
In April 2021, Scottsdale became the eighth city in the state to pass LGBTQ nondiscrimination protections.
In March 2020, the state legislature passed a bill that would prohibit transgender girls from participating in girl’s sports. The state senate introduced a similar bill in February 2021. Arizona repealed its “Don’t Say Gay” law that had prohibited teachers from discussing LGBTQ+ people or issues in the classroom in April 2019.
In the Fall of 2018, Republican candidate for secretary of state Steve Gaynor (who lost the race) said that an anti-discrimination law protecting LGBTQ+ people in the workplace was unnecessary because employers should just be compassionate.
Senator Kyrsten Sinema became the first openly bisexual person elected as a U.S. Senator in 2018.
In McGlaughlin v. Jones (2017), the Arizona Supreme Court unanimously agreed that the presumption of paternity given to men who are married to the mother of a child at any time within 10 months of the birth of the child applies equally to women in same-sex couples.
In May 2016, now-Senator Martha McSally, who has a 48 score from Human Rights Campaign (most Arizona Republicans score a zero), was one of only 29 Republican House members who voted for the Maloney amendment to prohibit LGBTQ+ discrimination by federal contractors.
In 2014 then Governor Jan Brewer vetoed SB 1062, a religious freedom law passed by the Arizona state legislature which would have expanded the definition of “person” to include “any individual, association, partnership, corporation … estate, trust, foundation or other legal entity.” SB 1062 also would have allowed any person to use the free exercise of religion as a claim or defense in a lawsuit regardless of whether the state was party to the proceeding. Brewer said that the bill did not “address a specific and present concern related to religious liberty in Arizona.”
After easily passing the state house and senate, Arizona Governor Doug Ducey (Rep.) vetoed SB1456 which would have further restricted curriculum and access to sex education, specifically inclusive of LGBTQ+ topics in the state.
Arizona has 18 active anti LGBTQ+ laws moving through the state legislator. This is a state to watch.
For more context around these scores, and to learn more about the criteria we used to assess how state laws, actions and attitudes toward LGBTQ+ people create business and talent risks, please visit www.outleadership.com/staterisk.
Status of LGBTQ+ Organizing and Community
In February 2019, after the United Methodist Church reaffirmed a ban on LGBTQ+ clergy and marriages, Arizona’s chapter of the UMC publicly came out against homophobic discrimination.
Phoenix Pride, the largest LGBTQ+ event in the state, has taken place annually since 1981. Today, about 37,000 people attend the two-day festival and parade.
Cultural Views of the LGBTQ+ Community
After the city of Mesa passed LGBTQ nondiscrimination protections in March 2021, a political group called “United for Mesa” collected enough signatures to bring the option to overturn it to a ballot.
Since 2008, the anti-LGBTQ+ group Alliance Defending Freedom (which the Southern Poverty Law Center classifies as a hate group, and which defended the plaintiff in the Masterpiece Cakeshop case) has profited when Arizonans buy “In God We Trust ” license plates. After a Democratic lawmaker co-sponsored a bill to do away with the plates, the group accused him of religious discrimination.
Brush and Nib et al v Phoenix, decided by the state Supreme Court in September 2019, ruled that a Phoenix stationary store’s refusal to make invitations for a same-sex wedding did not violate the city’s anti-discrimination law. The court said that the decision was narrow and still upheld the law overall.